The Hong Kong Monetary Authority said the Fed’s decision to hold rates met
market expectations and Hong Kong money and financial markets remain orderly. A
persistent wide HKD‑USD interest-rate differential means carry trades could
gradually weaken the HKD; the HKD exchange rate and HIBOR path face material
uncertainty, depending on market appetite for carry, HKD funding supply/demand
from capital-market activity and seasonal factors. US policy rates remain
uncertain and will depend on inflation, the labour market and incoming data,
which will affect Hong Kong’s rate environment. Market participants should
factor and manage interest-rate risk for property, investment and borrowing
decisions. HKMA will continue to monitor markets closely to maintain monetary
and financial stability.
