HONG KONG, Sept 19 Reuters The Hong Kong Monetary Authority HKMA on Thursday cut its base rate charged via the overnight discount window by 50 basis points to 5.25, tracking a move by the U.S. Federal Reserve.

Hong Kong39;s monetary policy moves in lockstep with the United States as the city39;s currency is pegged to the greenback in a tight range of 7.757.85 per dollar.

HKMA said the U.S. interest rate cut will have a positive impact on the economy of the Asia financial centre and will provide some room for easing of local interest rates.

In Hong Kong, our financial and monetary markets have continued to operate in a smooth and orderly manner. Market liquidity condition has remained stable with the Hong Kong dollar exchange rate hovering within the convertibility zone, HKMA Acting Chief Executive Howard Lee told reporters.

The rate cut cycle has just begun, interest rates will remain at relatively high level in the foreseeble future. The public should carefully assess and continue to manage the interest rate risk when making property purchase, mortgage or other lending decisions, Lee added.

Hong Kong major banks followed with HSBC cutting its best lending rate in the city by 25 basis points to 5.625 effective Sept. 20, and Bank of China Hong Kong said it would cut its Hong Kong prime rate to 5.625 from 5.875 effective Sept. 23.

Even though uncertainty about future U.S. interest rates still exists, the direction is becoming clearer. Hong Kong interest rates are…