The Hong Kong Monetary Authority left its base rate unchanged at 4.0% on March 19, 2026, moving in step with the U.S. Federal Reserve, which earlier maintained its target range at 3.00%–3.75%. The decision underscores Hong Kong’s close policy alignment with the United States under the Linked Exchange Rate System, under which the Hong Kong dollar is pegged at 7.75–7.85 per U.S. dollar. As a result, domestic interest rates largely track U.S. monetary policy, irrespective of local economic conditions. Analysts noted that persistent tensions in the Middle East are adding uncertainty to the outlook for the timing and scale of potential rate cuts this year. Despite the unchanged policy stance, Hong Kong’s economy remains robust: annual GDP growth quickened to a two-year high of 3.8% in Q4 2025, supported by resilient private consumption, solid external trade, and a continued recovery in inbound tourism, highlighting firm underlying momentum even as external risks persist.