The Monetary Authority of Macau (AMCM) announced today a new rise in the main reference interest rate to 5%, the highest level since December 2007, in the midst of the global financial and economic crisis.
The AMCM approved an increase of 0.25 percentage points, the eighth increase since March 2022, setting the rediscount rate at 5%, the amount charged to banks for short-term capital injections, according to a statement.
The financial regulator of the Chinese special administrative region thus followed the increase announced on Wednesday by the US Federal Reserve (Fed).
The AMCM said that the rise was inevitable, as Macau’s currency, the pataca, is pegged to the Hong Kong dollar, so “the interest rate in Macau is consistent with the interest rate in Hong Kong”.
The AMCM’s decision came shortly after the Hong Kong Monetary Authority announced the rise in the reference interest rate, due to the increase imposed by the US central bank.
The Hong Kong dollar is pegged to the US dollar.
After the announcement, the Hong Kong stock exchange traded higher, with the main index, the Hang Seng, rising 0.57% at 10:00 am (02:00 am in Lisbon).
On Wednesday, the Fed announced a 25 basis point hike, a slowdown from the 50 basis point hike at the last meeting.
The Federal Open Market Committee (FOMC) “seeks to achieve full employment and inflation close to 2% in the long term. To support these goals, the Committee decided to raise the federal funds rate to a range between 4.50% and 4.75%,” the US central bank said in a statement.
After four consecutive meetings in which it announced a rise in interest rates of 75 basis points, the US central bank decided in December to raise rates by 50 basis points, having now slowed down the pace.
