Monetary Authority of Macau raises discount base rate to 1.25%

16 March 2017

The Monetary Authority of Macau (AMCM) increased its overnight discount base rate by one-quarter of a percentage point to 1.25%, the AMCM said in a statement issued on Thursday.

The discount rate is the interest rate that the central bank, or in this case the monetary authority, charges to lend money to commercial banks, acting as a lender of last resort.

The decision is justified by the fact that the Monetary Authority of Hong Kong on Thursday also decided to increase its benchmark rate by 25 basis points because the Hong Kong dollar is pegged to the US dollar.

The Federal Reserve of the United States decided on Wednesday to increase its own benchmark interest rate by 25 basis points to a range of between 0.75% and 1.0%.

“In view of the indexing of the pataca to the Hong Kong dollar and to the efficient operation of the exchange rate indexing system between the two currencies, the AMCM will also increase the benchmark rate by 25 basis points,” the statement said. (macauhub)