The Monetary Authority announced today that the base rate has been set at 4% with immediate effect.

The decrease follows a 25-basis point downward adjustment in the target range for the US federal funds rate on December 10.

The base rate is the benchmark interest rate used to compute the Discount Rates for repurchase transactions through the Discount Window.

It is currently set at either 50 basis points above the lower end of the prevailing target range for the US federal funds rate, or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates, whichever is the higher.