Macao’s Base Rate of the Discount Window Lowered to 4.50%

MACAU, September 18 - The Monetary Authority of Macao (AMCM) lowered the Base Rate of the Discount Window today (18 September 2025) by 25 basis points to 4.50%, marking the first policy rate cut of the year.

Given the currency peg between the Macao pataca (MOP) and the Hong Kong dollar (HKD), it is essential for the policy rate movements in both jurisdictions to remain closely aligned, so as to ensure the effective operation of the linked exchange rate system (LERS).  Hence, the AMCM followed the Hong Kong Monetary Authority in lowering the Base Rate by 25 basis points synchronously.  Under the LERS between the HKD and the US dollar, the corresponding policy rate adjustment of Hong Kong was based on the US Federal Reserve’s policy action to lower the Fed funds rate target range by 25 basis points on 17 September 2025 (US time).

In the first seven months of 2025, the prime lending rate of Macao banks has remained largely unchanged at 5.51%.  As the US Federal Reserve delivered the first interest rate cut this year, it provides room for potential downward adjustment in Macao’s lending rates.  This would in turn alleviate the financial pressure on corporate borrowers and mortgagors, while the reduction in financing costs would help stimulate the local economy.

In view of the prevailing uncertainties in the global economy, firms and individuals should prudentlyassess their financial capabilitieswhen applying for credit facilities such as mortgages.  The AMCM will continue to monitorthe operation and riskprofile of Macao banks, urging the banking sector to properly manage and address the relevant risks.