Macau’s discount window base rate has been lowered by 25 basis points to 2.5 percent, the Monetary Authority of Macao (AMCM) announced yesterday.
The discount window is an instrument of monetary policy that allows eligible institutions to borrow money from the central bank or another monetary authority, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions.
The announcement by Macau’s quasi-central bank pointed out that as the pataca is pegged to the Hong Kong dollar and the movements of policy rates in the two special administrative regions should be basically consistent, it followed the Hong Kong Monetary Authority (HKMA) to lower the discount window base rate, which ended the local policy rate upcycle which began in December 2015.
