HONG KONG, Dec 15 (Reuters) - The Hong Kong Monetary Authority on Thursday raised the base rate charged through its overnight discount window by 25 basis points to 1 percentage point.
The move from Hong Kong’s de facto central bank followed the U.S. Federal Reserve’s decision to raise the benchmark federal funds rate to a range of 0.50 percent and 0.75 percent on Wednesday.
Hong Kong tracks U.S. rate moves as its currency is pegged to the U.S. dollars.
The monetary authority sets its base rate through a formula that is 50 basis points above the prevailing U.S. Fed Funds Target or the average of the five-day moving averages of the overnight and one-month HIBORs. (Hong Kong Inter-bank Offered Rate) (Reporting by Farah Master and Joyce Leung; Editing by Michael Perry)