September 26, 2018 / 11:31 PM / 2 months ago

Hong Kong's central bank raises base rate by 25 bps after Fed hike

HONG KONG, Sept 27 (Reuters) - The Hong Kong Monetary Authority (HKMA) raised its base rate by 25 basis points on Thursday to 2.50 percent in line with a widely expected move by the U.S. Federal Reserve overnight.

Hong Kong tracks U.S. rate moves because its currency is pegged to the greenback.

The monetary authority sets its base rate through a formula that is 50 basis points above the prevailing U.S. Fed Funds iarget or the average of the five-day moving averages of the overnight and one-month HIBORs (Hong Kong Inter-Bank Offered Rate). (Reporting by Donny Kwok; Editing by Sam Holmes)

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