The Monetary Authority today announced that it has increased the base rate to 5% with immediate effect.

The increase followed the 25-basis point upward shift in the target range for the US federal funds rate on February 1.

The base rate is the interest rate forming the foundation upon which the Discount Rates for repurchase transactions through the Discount Window are computed.

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.