Hong Kong’s central bank on Thursday lowered its base interest rate by 25 basis points to 4.50%, tracking a cut by the US Federal Reserve.

It was the first easing by the Hong Kong Monetary Authority since a 25 basis point cut last December. The rate is charged via the overnight discount window.

Major Hong Kong banks partially followed, with HSBC lowering its Hong Kong dollar best lending rate by 12.5 bps to 5.125% effective September 19, and Bank of China (Hong Kong) also reducing its Hong Kong dollar prime rate to 5.125% from 5.25%.

Hong Kong’s monetary policy moves in lock-step with the United States as the city’s currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.

“We believe the adjustments announced today are appropriate considering the US rates decision and the local market conditions,” Luanne Lim, chief executive officer, Hong Kong, HSBC, said in a statement.

“We will continue to monitor the external environment and local economic outlook, and adopt an agile approach when we evaluate future rate decisions,” Lim added.

HKMA chief executive Eddie Yue said the reduction will have a positive impact on the city’s property market and economy, noting that financial and monetary markets continue to operate in a smooth and orderly manner.