HKMA: FOMC's Decision to Maintain Interest Rate Unchanged Meets Market Expectations

　　GLO Hong Kong, July 31st｜HKMA responds to FOMC interest rate decision. The FOMC's decision to maintain the interest rate unchanged meets market expectations. Currently, the interest rate difference between HK and US remains attractive for swap transactions, keeping the HKD-USD exchange rate close to 7.85 levels, while also providing support from recent stock-related demand for HKD funds. As for future changes in HKD liquidity supply and other uncertain factors including FOMC monetary policy and direction of interest rates, stock market sentiment, external financial markets, and global capital flows, the possibility of triggering a weak exchange guarantee may arise again. In that case, the HKMA will buy HKD to sell USD according to the Linked Exchange Rate system, and the banking system's excess funds will decrease accordingly, while the HKD overnight interest rate will gradually rise. The uncertainty surrounding future US rate cuts is considerable, and the current interest rate environment in Hong Kong may also be subject to changes due to various factors mentioned above. As such, citizens should fully consider the possibility of rising HKD interest rates when making property investment, borrowing, or other financial decisions, and manage related risks accordingly. The HKMA will continue to closely monitor market changes, maintain currency and financial stability.