Hong Kong Monetary Authority: It is expected that factors such as the supply and demand of HKD capital and overall liquidity will continue to affect the HKD interest rate

The Zhitong Finance App learned that on May 8, in response to the Federal Reserve's interest rate decision, the Hong Kong Monetary Authority stated that the Hong Kong currency and financial markets in China have maintained an orderly operation, and that the Hong Kong dollar exchange rate has strengthened recently, mainly driven by Hong Kong dollar demand related to stock investment and the appreciation of regional currencies against the US dollar, triggering a “strong exchange guarantee” of HK$7.75 to $1 under the linked exchange rate system. The Hong Kong Monetary Authority buys and sells Hong Kong dollars from the market in accordance with the joint exchange system. The aggregate balance of the banking system also increased accordingly, increasing the liquidity of the Hong Kong dollar and reducing interest rates somewhat. It is expected that factors such as the supply and demand of HKD capital and overall liquidity will continue to affect the HKD interest rate, particularly interest rates for shorter periods.

According to public information, the US Federal Reserve (Federal Reserve) Federal Open Market Committee announced early this morning, Hong Kong time, after two consecutive days of meetings, to maintain the federal funds rate target range of 4.25-4.5%.

The Hong Kong Monetary Authority pointed out that the decision of the Federal Reserve to keep interest rates unchanged was in line with market expectations. However, a series of tariff measures recently announced by the US authorities have added uncertainty to local inflation and economic prospects, so the Federal Reserve is currently taking a wait-and-see attitude in monetary policy.

Changes in US tariff measures and US interest rate trends will be the focus of attention in financial markets. There is also great uncertainty. Global financial markets will inevitably be affected and fluctuate. The public should carefully consider and manage risk when making decisions to buy, invest or borrow a home. The Hong Kong Monetary Authority will continue to closely monitor market changes and maintain monetary and financial stability.