Macau, China, Sept. 18, 2025 (Lusa) - Macau's Monetary Authority lowered its benchmark interest rate on Thursday by 0.25 percentage points, marking the first decrease this year, to 4.5%. This adjustment was made in response to the decline in rates in the United States and Hong Kong.

‘Given the peg of the pataca to the Hong Kong dollar, and to ensure the effective functioning of the exchange rate peg regime between Macau and Hong Kong, it is necessary that, in principle, variations in monetary policy interest rates in both regions remain aligned,’ explained the Authority in a statement, signalling that there may be further decreases.

Thus, it continues, ‘the Monetary Authority of Macao followed the 25 basis point reduction in the base interest rate announced by the Hong Kong Monetary Authority,’ an operation that ‘also resulted from the exchange rate peg between the Hong Kong dollar and the US dollar, given that the US Federal Reserve (Fed) decided on 17 September 2025 to reduce the target for the federal funds rate band by 25 basis points.’

The reference interest rate, also known as the rediscount rate or key rate, is the rate at which the central bank lends to commercial banks, and is usually lower than the interest rate charged on loans to private and corporate customers.

'In the first seven months of 2025, the prime lending rate charged by Macau's banks generally remained at 5.51%,' recalls the AMCM.

The monetary authority signalled that, ‘with the first interest rate cut by the Fed this year, it is expected that there will be room for future decreases in lending rates in Macau, which could ease the financial pressure on companies with credit and mortgage borrowers’.

The Fed decided on Wednesday to cut interest rates by 25 basis points, to a range between 4.00% and 4.25%, for the first time since December 2024, the institution announced at the end of a two-day meeting.

MBA/ADB // ADB.

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