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# HKMA Tracks Fed's Steady Rates Amid Uncertainty
- URL: https://www.theglobalbanker.com/hkma-tracks-feds-steady-rates-amid-uncertainty/
- Published: 2026-03-19T16:06:10.000Z
- Updated: 2026-10-01T21:27:52.000Z
- Description: The Hong Kong Monetary Authority (HKMA) has reaffirmed its commitment to monetary stability following the US Federal Reserve's decision to keep the federal funds rate unchanged at 3.5-3.75%.
- Author: TGB Editorial Team
- Tags: Central Banks, Asia-Pacific

The Hong Kong Monetary Authority (HKMA) has reaffirmed its commitment to monetary stability following the US Federal Reserve's decision to keep the federal funds rate unchanged at 3.5-3.75%. This move, announced on March 18 in Washington (early March 19, Hong Kong time), was in line with market expectations, the HKMA said.

Under Hong Kong's Linked Exchange Rate System (LERS), the local currency is linked to the US dollar within a Convertibility Zone of HK$7.75 to HK$7.85 per US$1\. Under the system, Hong Kong dollar interbank rates generally track their US dollar counterparts. The HKMA's official statement emphasized that "Hong Kong's monetary and financial markets have continued to operate in an orderly manner."

#### FED'S DOT PLOT SIGNALS CAUTION

The Fed's accompanying "dot plot"—a summary of policymakers' projections—suggested a potential 25 basis point rate cut before year-end 2026\. However, the HKMA noted significant caveats: "The market generally considers that the path of US monetary policy remains quite uncertain, while recent tensions in the Middle East region introduce greater uncertainty to oil prices as well as the outlook for US inflation." 

The HKMA said shorter-tenor Hong Kong Interbank Offered Rates (HIBOR) tend also to be influenced by the supply and demand of Hong Kong dollar funding in the local market, such as seasonal factors and capital market activities.

#### MONETARY POLICY TRANSMISSION

The HKMA's response cautioned the public directly: "The future trend of US interest rates is quite uncertain, which may influence the interest rate environment in Hong Kong. The public should carefully manage interest rate risks when making decisions about property purchase, investment or borrowing." 

#### LINKED SYSTEM'S ENDURING RESILIENCE

The Linked Exchange Rate System has been in place since October 1983\. The system's stability depends on the HKMA's ability to maintain the peg through its Convertibility Undertakings and liquidity management.

#### HKMA'S VIGILANT WATCH

Echoing its post-decision statement, the HKMA pledged: "The HKMA will continue to closely monitor market developments and maintain monetary and financial stability."