The Acting Chief Executive of the Hong Kong Monetary Authority (HKMA), Howard Lee, on Thursday urged people to remain cautious when it comes to applying for mortgages or making borrowing decisions, warning that interest rates will remain high for the "foreseeable period of time".

Lee's comments came after the US Federal Reserve reduced its key lending rate by half a percentage point. The move was tracked by the HKMA, with banks in the SAR also announcing cuts to their lending rates.

"The level of US interest rates, or even the one in Hong Kong, are only some of the factors that will affect the overall economy or the flow of capital... it might also depend on the development of, for example, the real economy and geopolitical tensions," Lee said.

"Therefore we can't tell when the eased interest rate, following the Fed rate cut, will have an effect to the economy. It will also depend on other factors. But at least among all the factors, we have one that is a positive."

Financial Secretary Paul Chan also appealed for caution, citing uncertainty in the US economy and geopolitics.

"Our assessment is that when US interest rates come down, Hong Kong has room to reduce rates. It will be beneficial to the operations of local enterprises as they face less liquidity stress. It will also have a positive impact on the assets market," Chan told reporters ahead of a trip to Beijing.

"But at the same time, there are often conflicts in geopolitics and international trade, and we have to be aware of them."