efe-epaHong Kong, China

The Hong Kong Monetary Authority on Thursday raised the city's base lending rate by 25 basis points to 2.25 percent with immediate effect to match a similar hike by the Federal Reserve of the United States hours earlier.

Analysts say the increase in the base rate is aimed at maintaining stability of the local currency, the Hong Kong dollar, which is pegged to the US dollar.

The US Fed has said there will be two more rate increases in 2018, which will directly impact borrowers in Hong Kong, as an increase in rates by Hong Kong banks will lead to higher mortgage rates for the property sector, according to the HKMA.