The Hong Kong Monetary Authority, the de facto central bank of the city, announced in Hong Kong on Wednesday to lower its Base Rate by 75 basis points to 5.00 percent with immediate effect according to a pre-set formula.

The reduction in the Base Rate in Hong Kong followed the 75 basis points cut in the US federal funds target rate overnight, the Monetary Authority said in a statement.

The Base Rate in Hong Kong is the interest rate forming the foundation upon which the Discount Rates for repurchase-agreement transactions through the Discount Window are computed.

Hong Kong's Base Rate is currently set at either 150 basis points above the prevailing US federal funds target rate or the average of the five-day moving averages of the overnight and one-month HIBORs, whichever is the higher.