The Hong Kong Monetary Authority (HKMA) slashed its base rate by 25 basis points to 4.0% on December 11, mirroring the U.S. Federal Reserve’s move and bringing borrowing costs to their lowest level since October 2022. This marked the HKMA’s third rate reduction of the year. The adjustment, applied through the overnight discount window, highlights Hong Kong’s continued policy alignment with the U.S., as the city’s currency remains closely pegged to the U.S. dollar at 7.75-7.85 per dollar. The latest decision followed recent data showing the city's economy grew by 3.8% yoy in Q3, accelerating from a 3.1% rise in Q2 and marking the strongest pace in nearly two years, amid stable private consumption, solid exports, and robust tourism activity.