The Hong Kong Monetary Authority (HKMA) left its base rate unchanged at 4.0% on June 18, 2026, in line with the U.S. Federal Reserve's decision to keep its target range at 3.5%–3.75% at its first policy meeting under new Chair Kevin Warsh. The decision reflects Hong Kong's Linked Exchange Rate System, which pegs the Hong Kong dollar within a 7.75–7.85 per U.S. dollar trading band, requiring local interest rates to track U.S. monetary policy closely regardless of domestic economic conditions. Despite higher borrowing costs, Hong Kong's economy has remained resilient. Annual GDP growth accelerated to a near five-year high of 5.9% in the first quarter of 2026, supported by firm domestic demand and resilient external trade, even as businesses continued to navigate geopolitical tensions and supply chain disruptions stemming from the Middle East conflict.