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The US federal funds target range is 4.25%-4.50%. The five-day moving averages of overnight and one-month HIBOR are 3.60% and 4.00%. What is the HKMA's Base Rate?
The HKMA sets the Base Rate at the higher of (a) 50 basis points above the lower end of the prevailing US federal funds target range, or (b) the average of the five-day moving averages of overnight and one-month HIBOR. Rule (a): 4.25% + 0.50% = 4.75%. Rule (b): (3.60% + 4.00%) / 2 = 3.80%. The higher is 4.75%. 5.00% wrongly adds the spread to the upper end of the range; 3.80% takes the HIBOR average although it is lower; 5.25% uses a 100 basis point spread instead of 50. Source: HKMA, Liquidity Facilities: Base Rate (hkma.gov.hk) (as at October 2026).
Adding the spread to the upper end of the US range. The formula uses the lower end plus 50 basis points.
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