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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority (HKMA) announced today (December 17) the adjustment downwards of the Base Rate to 0.5% with immediate effect according to the new formula announced on October 8, 2008 and following the decision of the US Federal Reserve on December 16 (US time). Since the US federal funds target rate is reduced to the range of 0% to 0.25% and federal funds are effectively trading at 0%, the Base Rate is set at 50 basis points above the lower boundary of the target range at 0.5%.
The Base Rate is the interest rate forming the foundation upon which the Discount Rates for repurchase-agreement transactions through the Discount Window are computed. According to the new formula announced on October 8, 2008, the Base Rate is set at 50 basis points above the prevailing US federal funds target rate.
For further enquiries, please contact:
Thomas Chan, Communications Chief, at 2878 1480 or
Peggy Lo, Manager (Communications), at 2878 1687
Ends/Wednesday, December 17, 2008
Issued at HKT 11:01
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