The Hong Kong Monetary Authority has adjusted the Base Rate to 4.5% effective immediately, reflecting a change in the US federal funds rate and HIBOR.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On 18 September 2025, the Hong Kong Monetary Authority ("HKMA") announced that the Base Rate has been set at 4.5%, effective immediately.
The Base Rate, which is the interest rate for computing Discount Rates in repurchase transactions conducted through the Discount Window, is now established at 4.5%. This is determined by a pre-set formula involving the US federal funds rate and the Hong Kong Interbank Offered Rate ("HIBOR").
Following a 25-basis point reduction in the US federal funds rate target range on 17 September, the Base Rate was calculated to be 4.5% under the prevailing conditions. The lower end of the target range for the US federal funds rate is 4.5%, while the average of the five-day moving averages of the overnight and one-month HIBORs stood at 2.94%. Therefore, the formula dictates the Base Rate to be 4.5%.
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