Several banks including HSBC, Standard Chartered, Hang Seng Bank and Bank of China (BOC) said on Thursday to maintain their best lending rate (prime rate for BOC) unchanged in Hong Kong, even after the Hong Kong Monetary Authority (HKMA) earlier raised its base rate.

The city’s de facto central bank announced to raise the benchmark interest rate by 25 basis points to 1.25 percent for the second times in three months, after the US Federal Reserve (Fed) raised interest rate overnight.

Hong Kong dollar interest rates would gradually increase following the U.S. move under the currency peg system with the U.S. dollar, but it would be difficult to predict the precise pace, according to the HKMA Chief Norman Chan.

Hong Kong stock market surged on Thursday by 2.1 percent to its highest level since August 2015 after Fed’s expected announcement. “The public they should not under-estimate the impact of higher interest rate on the serviceability of their debts, especially mortgage loans,” warned Chan.

HKD exchange rate could hit the weak range side at 7.8500, since Hong Kong interest rate normalization would entail the outflow of funds from local currency into USD, said Chan. “One should not over-react as this is a natural and inevitable process.”

HSBC’s best lending rate in Hong Kong was last changed on November 2008, the bank said in a statement. HKMA also asked banks to tight lending and to apply higher review standard when approving loans to big property developers, according to Chan.

According to the U.S. Fed’s latest projection, there will be totally eight to nine rate hikes from now on until 2019, by which time the fed funds rate may rise to around 3 percent.

The U.S. interest rate normalization would definitely impact on fund flows and asset markets around the world including Hong Kong, according to Chan. New policies of Trump Administration, potential black swans, or some unpredictable geopolitical events could cause ripples over Hong Kong market, added Chan.

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