The Hong Kong Monetary Authority cut its base rate to a record low on Wednesday, exerting more pressure on HSBC and other banks to cut their lending rates in the territory.

The central bank slashed the rate charged through its overnight discount window by 100 basis points to 0.50 per cent, the lowest since the HKMA set up the base rate in September 1998.

HKMA’s move followed the US Federal Reserve decision to cut interest rates to a record low range of zero to 0.25 per cent, a move aimed at easing credit and supporting the US economy, which analysts say risks falling into a prolonged recession.

South China Morning Post