The Hong Kong Monetary Authority (HKMA) cut its base rate by 25 basis points to 4.50%, following the US Federal Reserve’s move.

Hong Kong’s central bank, the Hong Kong Monetary Authority (HKMA), has reduced its base interest rate by 25 basis points to 4.50% on Thursday, 18 September 2025, mirroring a similar move by the US Federal Reserve.

This marks the first rate cut by the Hong Kong Monetary Authority (HKMA) since December 2024.

In response, major banks in Hong Kong made partial adjustments. HSBC lowered its Hong Kong dollar best lending rate by 12.5 basis points to 5.125%, effective 19 September, while Bank of China (Hong Kong) reduced its prime rate to 5.125% from 5.25%.

Hong Kong’s monetary policy is closely tied to the US due to its currency peg to the dollar, maintaining a range of 7.75-7.85 per dollar.

HKMA Chief Executive Eddie Yue expressed optimism, stating the rate cut would benefit the city’s property market and economy, while emphasising the stability of financial and monetary markets.

The Federal Reserve had earlier reduced its interest rate by 25 basis points and signalled further cuts throughout the year.