March 21, 2018 / 11:26 PM / 8 months ago

Hong Kong's central bank raises base rate 25 basis points after Fed hike

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

HONG KONG (Reuters) - The Hong Kong Monetary Authority raised its base rate charged through its overnight discount window by 25 basis points on Thursday to 2.00 percent.

The move by Hong Kong’s de facto central bank followed a decision by the U.S. Federal Reserve to raise interest rates by a quarter of a percentage point in its first hike this year.

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

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 Donny Kwok; Editing by Anne Marie Roantree and Richard Pullin

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