Hong Kong fol­lows Fed move, Thai­land stands pat

New Straits Times - - Business | World -

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

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