Hong Kong Monetary Authority cuts base rate by 25 basis points to 4.50% aligning with U.S. Federal Reserve action

Hong Kong Monetary Authority cuts base rate by 25 basis points to 4.50% aligning with U.S. Federal Reserve action

In a move aligning with the U.S. Federal Reserve's recent actions, the Hong Kong Monetary Authority (HKMA) has reduced its base rate by 25 basis points to 4.50%. This decision is part of the broader monetary policy adjustments aimed at supporting the local economy and maintaining financial stability.

The HKMA's base rate reduction follows a series of global economic developments, including the Federal Reserve's recent interest rate cuts. The HKMA's action is designed to provide additional liquidity to the financial system and stimulate economic growth in Hong Kong.

The decision was announced in the 2025 Policy Address, where Chief Executive John Lee outlined various measures to bolster Hong Kong's digital finance ambitions. The HKMA is encouraging commercial banks to roll out tokenized deposits and expand the city's live tokenized-asset transactions .

The Policy Address also emphasized the importance of regularizing tokenized bond issuance and establishing a comprehensive regulatory framework for digital assets. The Securities and Futures Commission (SFC) is exploring ways to widen the range of digital-asset products available to professional investors while prioritizing investor protection .

The HKMA's move to cut the base rate is part of a broader strategy to keep Hong Kong among the world's leading financial hubs. Alongside expanding the bond market and strengthening stock-market rules, the city aims to grow its role in cross-border digital trade and the international use of the Chinese yuan .