(Xinhua)
Updated: 2008-01-31 20:07

HONG KONG -- The recent interest rate cuts in Hong Kong will help boost local consumption and asset values, Hong Kong's Monetary Authority Chief Executive Joseph Yam said Thursday.

However, he also said that the serial interest rate reductions by the United States Federal Reserve also reflected serious concerns about the US economy.

The Federal Reserve slashed its benchmark interest rate by half a percentage point to 3 percent Wednesday in a move to prevent the US economy from going into a recession, prompting a half- percentage point rate cut in Hong Kong on Thursday.

The currency in Hong Kong, a special administrative region and independent economy in south China, is pegged to the US dollar at 7.8 US dollars to 1 HK dollar.

Noting the US sub-prime mortgage meltdown has developed into a loan crisis, Yam said the US also faced risks in other financial sectors.

The future developments of the situation deserved close attention, he said.

Stock markets in the Asia Pacific region mostly ended lower Thursday as the expected rate cuts by the Federal Reserve failed to boost market confidence, with the benchmark Hang Seng Index in Hong Kong opening higher but closing down 0.84 percent at 23,455. 74.