Hong Kong Monetary Authority (HKMA) chief executive Eddie Yue on Thursday warned about uncertainties ahead for borrowing costs after the city's de facto central bank lowered its base interest rate for the second time this year – by a quarter point to 4.25 percent.

Following the HKMA move, the city's largest commercial lender, HSBC, took the lead by announcing it's cutting prime lending rates by 12.5 basis points to 5 percent, effective from Friday.

Bank of China (Hong Kong) followed the move and the new rate will become effective from Monday, while Standard Chartered Bank will cut its prime lending rates by the same margin to 5.25 percent from Monday.

The HKMA move came as part of a lock-step mechanism that began when the US Federal Reserve lowered its target rate by the same margin overnight to a range of 3.75 to 4 percent, also the second of such cuts this year.

However, Yue warned that while the reductions this time around, which will help ease the mortgage burden on homebuyers while rebooting businesses, have been in line with market expectations, the pace of future rate cuts remains uncertain.

"The renewed tariff uncertainties and the unavailability of certain major economic data have added complexity to the assessment of the US labour market and inflation trends," he said during a press briefing.

"On Hong Kong dollar deposit and lending rates, banks will normally take into account factors such as funding supply and demand, the level of interbank rates and also their own funding cost structures to assess the merit and extent of adjustment.

"The extent and pace of future US interest rate cuts are subject to uncertainties, which may influence the interest rate environment in Hong Kong. The public should carefully manage interest rate risk when making financial decisions."

Nonetheless, Yue noted that the latest rate cut will again inject positive momentum into the city's economy and the property market as the Hong Kong interbank offered rate (Hibor), which is linked to the city's mortgages and corporate loans, could also gradually go down.

When asked about his expectations for the next policy meeting by the Fed in December, Yue again cautioned that "there's no rate path projections" from the US central bank, adding that market expectations for such a potential rate cut had "notably" been lowered to 60 percent from 70 percent previously.

"If you look at the inflation [trends] in the United States, there are actually a few slight upward signals," he said.

"While the job market there shows a few downward signs, the policy objectives [from the Fed] are moving in different directions.

"How to strike a balance between the two is somewhat difficult to a certain extent.

"Coupled with the factor of the government shutdown in the United States, if the Fed can't even easily obtain some of the most important economic data, it will actually be difficult for them to make judgments."