On September 18, 2023, the Hong Kong Monetary Authority (HKMA) announced a reduction in its base interest rate by 25 basis points to 4.50%, aligning with the U.S. Federal Reserve’s recent decision. This marks the first rate cut by the HKMA since December 2022, when it last lowered rates by a similar margin. The adjustment, implemented through the overnight discount window, aims to maintain economic stability in Hong Kong, whose currency is pegged to the U.S. dollar within a narrow range of 7.75-7.85 per dollar. Major banks in Hong Kong, including HSBC and Bank of China (Hong Kong), partially followed suit, reducing their prime lending rates to 5.125% effective September 19. HSBC’s Hong Kong CEO, Luanne Lim, emphasized that the decision reflects both the U.S. rate cut and local market conditions, while HKMA Chief Executive Eddie Yue highlighted the potential positive impact on the city’s property market and broader economy. The Federal Reserve’s recent quarter-point rate cut and its indication of further reductions this year have influenced Hong Kong’s monetary policy, though Yue cautioned that the pace and extent of future U.S. rate cuts remain uncertain.