The Macau Monetary Authority (AMCM) on Wednesday lowered its base rate (BR) of the discount window by 50 basis points to 1.50 percent.
Macau’s quasi-central bank said in statement that “as the pataca is linked to the Hong Kong dollar, the movements of policy rates in Hong Kong and Macau should be basically consistent in order to maintain the effective operation of the linked exchange rate system.
“As a result, the AMCM followed its Hong Kong counterpart to adjust the base rate, after the policy action by the US Federal Reserve [on Tuesday in the United States] to lower the Fed funds rate target range by 50 basis points,” the statement said.
The statement noted that the Hong Kong dollar is linked to the US dollar under a similar linked exchange rate system.
According to Investopedia, the discount window is a central bank lending facility meant to help commercial banks manage short-term liquidity needs.
The base rate is the rate of interest used by the AMCM as a basis for charging for loans.
The AMCM is overseen by the local government’s Secretariat for Economy and Finance.
(The Macau Post Daily/Macau News)
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