Hong Kong Interest Rate

The Hong Kong Monetary Authority (HKMA) kept its base rate unchanged at 4.75% on May 8, following the U.S. Federal Reserve's decision to maintain its key benchmark at the 4.25%–4.50% range for the third consecutive meeting. Both central banks are adopting a wait-and-see approach amid the inflationary effects of escalating tariffs under Trump. HKMA's policy move aligns with the U.S. due to the Hong Kong dollar's peg to the greenback. The Hong Kong government recently highlighted that high levels of trade policy uncertainty will weigh on international trade flows and investment sentiment, clouding the near-term economic outlook. Despite this, the special administrative region saw a 3.1% year-on-year growth in Q1 2025—the strongest in five quarters—driven by strong tourism and robust exports ahead of anticipated U.S. tariff hikes.