The Hong Kong Monetary Authority (HKMA) on Thursday kept its base rate unchanged at four percent – after a similar move by the US Federal Reserve overnight.

Just hours earlier, the Fed announced it was keeping its target range for the federal funds rate unchanged – at between 3.5 percent and 3.75 percent – following the first Federal Open Market Committee (FOMC) meeting this year.

In a statement, the HKMA noted that the Fed's decision is in line with market expectations, but warned that the future of American monetary policy remains uncertain, depending on inflation and employment conditions.

"The future trend of US interest rates remains quite uncertain, which may influence the interest rate environment in Hong Kong," the statement said.

"The public should carefully manage interest rate risks when making decisions about property purchase, investment or borrowing," it noted.

The authority also said that the city's monetary and financial markets have continued to operate in an orderly manner, adding it will closely monitor market changes.

Under a currency peg known as the Linked Exchanged Rate System, the city's monetary policy has moved in lockstep with the Fed since 1983, with Hong Kong dollar interbank rates generally tracking their US dollar counterparts.

However, the HKMA also said that the shorter-tenor interbank rates could be affected by the supply and demand situation of the Hong Kong dollar funding in the local market.

The latest pause in rate reductions came after Hong Kong and US central bank policymakers trimmed their key interest rates by a total of 75 basis points last year – following three policy meetings since September.

Following the latest FOMC meeting, Fed chairman, Jerome Powell had indicated in a media briefing that there was no rush to further cut rates.

Among the FOMC policymakers, while 10 voted for no change, two members – Stephan Miran and Christopher Waller – had voted for a quarter-percentage-point rate cut, signalling division within the Fed.

Markets are also closely monitoring who will replace Powell when his term ends in May.

Waller is seen as a possible successor.

Following the HKMA move, HSBC kept its prime lending rate at five percent, while Standard Charted left its prime rate steady at 5.25 percent.