Hong Kong follows Fed move, Thailand stands pat
HONG KONG: The Hong Kong Monetary Authority yesterday raised the base rate charged through its overnight discount window by 25 basis points to 1.25 per cent.
The move from Hong Kong’s de facto central bank followed the United States Federal Reserve’s decision to raise interest rates on Wednesday.
Hong Kong tracks US rate moves as its currency is pegged to the US dollar.
Shares of banking and property companies will be in the spotlight as the interest rate increase could raise concerns on the health of their balance sheets.
In Thailand, Finance Minister Apisak Tantivorawong said yesterday he was not worried about fund outflows as the country had ample liquidity and the baht was still moving in line with market forces.
He said the US rate hike would not affect Thai economic policies.
Thailand’s central bank said its policy interest rate at 1.5 per cent was still accommodative for the economic recovery, suggesting no policy change is expected at its meeting later this month.
Thailand faced no risk of a lowinflation trap as headline inflation had returned to the central bank’s target range of one to four per cent, said deputy Bank of Thailand governor Mathee Supapongse. Reuters