The Fed cut its target for the federal funds rate, or the rate banks charge each other for overnight loans, to 3.0 per cent from 3.5 per cent on Wednesday in response to global market turmoil and fears of a US recession.

The action came one week after an emergency cut of 75 basis points, also matched in Hong Kong.

The HKMA generally follows the Fed's interest rate adjustments as Hong Kong's currency is pegged to the US dollar. The HKMA base rate is the reference rate for lending overnight funds to local banks. -- AFP