Monetary Authority of Macau raises discount base rate to 2.75%

21 December 2018

The Monetary Authority of Macau (AMCM) on Friday added 25 basis points to the discount rate raising it to 2.75%, the fourth review since the start of the year, the AMCM announced.

This rise is due to the Macau being indexed to the Hong Kong dollar, which in turn is pegged to the United States dollar, “in order to safeguard the efficient functioning of this exchange indexation regime.”

According to the statement, the AMCM decision follows a 25 basis point increase in the base interest rate announced by the Hong Kong Monetary Authority, which itself followed a US Federal Reserve decision on 19 December to raise the benchmark interest rate by 25 basis points.

The AMCM noted that some banks have increased the preferential interest rate and the interest rates in the individual deposit categories, so it warned the population about the risk of increased financial charges associated with interest rate hikes and that any decision to take on a loan should be carefully considered.

The discount rate is the price charged by the central bank of a country, in the case of Macau AMCM, on loans granted to commercial banks to solve difficult cash situations. (macauhub)