The Macau Monetary Authority (AMCM) has raised the base rate of the discount window by 75 basis points to 2.75 percent.
Macau’s quasi-central bank announced the increase in a statement yesterday.
“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,” the statement pointed out.
The increase took effect yesterday.
“Hence, the statement underlined the AMCM followed the Hong Kong Monetary Authority to adjust its base rate. Under the linked exchange rate system between the Hong Kong dollar and the US dollar, the related policy rate adjustment of Hong Kong was based on the policy action by the US Federal Reserve to raise the Fed funds rate target range by 75 basis points on Wednesday.
The discount window is a central bank lending facility meant to help commercial banks manage short-term liquidity needs, according to Investopedia.
The pataca-Hong Kong dollar peg stands at MOP1.0 to HK$0.97.
