Core Viewpoint - The Hong Kong Monetary Authority (HKMA) has lowered the base interest rate by 25 basis points to 4.25% following the Federal Reserve's decision to reduce the federal funds rate by 0.25% to a range of 3.75% to 4% [1] Summary by Relevant Sections - **Interest Rate Changes** - The HKMA's base interest rate is now set at 4.25%, reflecting a decrease of 25 basis points [1] - This adjustment aligns with the Federal Reserve's recent rate cut, which was anticipated by the market [1] - **Mechanism of Base Rate Calculation** - The base interest rate serves as the foundation for calculating the discount rate applicable to repurchase transactions conducted through the discount window [1] - Currently, the base rate is determined by taking the higher of either the lower limit of the current U.S. federal funds rate target range plus 50 basis points or the average of the 5-day moving average of overnight and 1-month Hong Kong Interbank Offered Rates (HIBOR) [1]