March 3, 2020 / 11:51 PM / a month ago

Hong Kong's central bank cuts interest rate after Fed move

FILE PHOTO: An attendant walks outside the entrance to Hong Kong Monetary Authority in Hong Kong, China November 10, 2015. REUTERS/Bobby Yip/File Photo

HONG KONG (Reuters) - The Hong Kong Monetary Authority (HKMA) lowered its base rate charged through the overnight discount window by 50 basis points to 1.5% on Wednesday, hours after the U.S. Federal Reserve delivered a rate cut of the same margin.

The monetary measures came as policymakers worldwide stepped up efforts to counter the widening economic fallout of the coronavirus epidemic, which originated in China late last year and has claimed the lives of over 3,000.

Hong Kong's monetary policy moves in lock-step with the United States as the city's currency HKD=D3 is pegged to the greenback at a tight range of 7.75-7.85 per dollar.

“There is still a lot of uncertainty in the evolution of the epidemic, there will still be very large volatility in financial markets,” the HKMA said in a statement on Wednesday morning.

“Investors must manage their risk properly,” it said.

With 90,000 cases worldwide in 77 countries and territories, the virus has upended global supply chains, with companies warning daily of hits to their sales and profits.

Reporting by Donny Kwok, Twinnie Siu and Noah Sin; Editing by Chris Reese & Shri Navaratnam

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