Hong Kong Monetary Authority: Interest rate cuts have a positive effect on Hong Kong's economy and property market

The Federal Reserve announced a rate cut of 25 basis points, lowering the federal funds target rate to a range of 3.75% to 4%. Following this, the Hong Kong Monetary Authority also reduced the base rate to 4.25%. The Chief Executive of the Hong Kong Monetary Authority, Richard Yu, stated that the recent stability in the Hong Kong residential market will have a further positive effect from the rate cut; if the Federal Reserve continues to cut rates in the future, the Hong Kong interbank offered rate will also decline accordingly, which will positively assist the Hong Kong economy and property market. Richard Yu mentioned that the U.S. rate cut of 0.25% aligns with market expectations, having been reduced by 1.5% since September last year. There is uncertainty regarding future U.S. policy decisions, and the Federal Reserve has indicated that there is no preset path for interest rates. The extent and pace of future U.S. rate cuts will affect the interest rate environment in Hong Kong, reminding citizens to adequately manage interest rate risks when purchasing property, investing, and borrowing. He emphasized that the operation of Hong Kong's monetary and financial markets is smooth and orderly, with the Hong Kong dollar interbank offered rate closely aligned with the U.S. dollar interbank offered rate. The Hong Kong residential property market has been relatively stable in recent months, but the real estate market is influenced by various factors such as the economy, employment, and supply and demand. If the U.S. continues to cut rates, under the linked exchange rate system, the Hong Kong dollar interbank offered rate will gradually decline, which will have a certain positive effect on the economy and the real estate market