Hong Kong raises interest rates after Fed

China’s Hong Kong Special Administrative Region has increased its benchmark interest rate by the same percentage point due to its exchange rate regime pegged to the U.S. dollar after the U.S. Federal Reserve (Fed) raised its benchmark interest rate by 25 basis points. The Hong Kong Monetary Authority (HKMA), the region’s de facto central bank, said in a statement that it raised its base rate to 5.5 percent following the Fed’s move to raise the federal funds rate to 5-5.25 percent on Thursday. The region has followed the Fed’s lead in monetary policy since the Hong Kong dollar, Hong Kong’s currency, was pegged to the U.S. dollar in 1983. The HKMA said that since the five-day moving averages of overnight and one-month HIBORs averaged 3.28 percent, the base rate was set at 5.5 percent.