The Hong Kong Monetary Authority responds to the Federal Reserve's interest rate decision

The Hong Kong Monetary Authority responded to the Federal Reserve's decision to raise interest rates, and the Federal Reserve's decision to maintain interest rates unchanged is in line with market expectations. At present, the Hong Kong-US interest rate spread is still attractive for carry trades, so the Hong Kong exchange rate continues to be close to the 7.85 level. At the same time, the recent strong demand for Hong Kong dollar funds related to stocks has provided some support for the Hong Kong exchange rate. In the future, depending on changes in the supply and demand of Hong Kong dollar funds, as well as other uncertainties including the Federal Reserve's monetary policy and the direction of US interest rates, stock investment market sentiment, peripheral financial marekt and global capital flows, the "weak exchange guarantee" may be triggered again.
At that time, the HKMA will buy Hong Kong dollars and sell US dollars in accordance with the linked exchange rate system, the aggregate balance of the banking system will decline accordingly, and the Hong Kong dollar interest rate will gradually increase. There is considerable uncertainty about the magnitude and pace of future interest rate cuts in the United States, and the current interest rate environment in Hong Kong may also change due to the above-mentioned various variables. When making home purchase, investment or borrowing decisions, the public needs to fully consider the possibility of rising Hong Kong dollar interest rates and manage related risks. The Hong Kong Monetary Authority will continue to closely monitor market changes to maintain monetary and financial stability. (Gold 10)