The Hong Kong Monetary Authority said the Federal Reserve's decision to hold
rates met market expectations. The Fed's post-meeting statement noted continued
growth, a steady labor market and still-elevated inflation, reflecting the
committee's concern about the inflation outlook. HKMA said Hong Kong's monetary
and financial markets remain orderly. Under the linked exchange rate system, HKD
interbank rates largely track US dollar rates, while short-dated HIBORs are also
driven by local HKD liquidity, including seasonal factors and capital-market
flows. Movements in US rates will depend on inflation, labor-market outcomes and
other data and will affect Hong Kong's interest-rate environment. HKMA said it
will continue to monitor markets to maintain monetary and financial stability.
