The Monetary Authority of Macau (AMCM) increased its rediscount rate, the rate at which it lends to commercial banks, by 25 basis points to 1.75, which is the fifth time it has raised the official interest rate since December 2015, the institution said in a statement on Thursday.
The decision follows a decision by the US Federal Reserve on Wednesday to increase its benchmark interest rate by 25 basis points from 1.25% to 1.5%, which was followed by the Monetary Authority of Hong Kong, whose currency is pegged to the US dollar.
The Federal Reserve said in a statement that the decision was influenced by the positive performance of the labour market, with employment rising and the unemployment rate declining to 4.1%, the lowest in the last 16 years, as a result of the pace of growth of the United States’ economy.
Macau, whose currency is indexed to the Hong Kong dollar, made a similar decision “in order to safeguard the effective operation of the MOP exchange rate indexed to HKD, the uniformity of the interest rate policy is justified.”
The AMCM said in the statement that the interest rates in the Macau money market have shown an upward trend in the last few months, which is why the liquidity level of the pataca has decreased. (macauhub)