FX.co ★ Hong Kong Holds Base Rate After Fed Move

The Hong Kong Monetary Authority (HKMA) left its base rate unchanged at 4.25% on October 29, 2026, after the U.S. Federal Reserve opted to keep its benchmark interest rate steady, a move that was widely anticipated by markets. The decision reflects the operation of Hong Kong’s Linked Exchange Rate System, under which the Hong Kong dollar is maintained within a trading band of HKD 7.75–7.85 per U.S. dollar, requiring local interest rates to broadly align with U.S. monetary policy.

Hong Kong’s economy expanded by 4.3% year-on-year in the second quarter of 2026, easing from 5.9% growth in the previous quarter amid softer domestic demand and weaker fixed investment, while exports remained resilient. It is still uncertain whether major local banks will adjust their lending and deposit rates in response; lenders are expected to announce their rate decisions on Thursday afternoon. Although the HKMA’s base rate provides an important reference, banks independently set their own prime and savings rates.