The Hong Kong Monetary Authority (HKMA) increased its base rate by 25 basis points (bps) on Thursday to a 15-year high of 5.0%, just hours after the Federal Reserve announced an increase by the same margin.

The monetary policy moves in lockstep with the U.S. as the currency is pegged to the Dollar in a range of 7.75-7.85 per Dollar.

“Rate hikes in the U.S. will not affect the financial and monetary stability of Hong Kong,” said HKMA chief executive Eddie Yue during a news briefing.

The U.S. Federal Reserve scaled back to a 25-basis point hike on Wednesday following a year of larger increases, with indications from Fed Chair Jerome Powell that a “couple” more are on the way.

“The rate hike cycle in the U.S. has not yet completed. The Hong Kong Dollar interbank rates might remain at elevated levels for some time,” Yue added.

Hong Kong is facing risks from inflationary pressures in advanced economies as well as aggressive monetary tightening. Elevated borrowing costs and a gloomy economic outlook have impacted asset prices. Indeed, private home prices declined 15.6% last year in the first annual fall since 2008, Reuters reports.

In addition, negative equity cases in Hong Kong’s residential mortgage loans were almost 22 times as high in Q4 compared to the previous one as house prices continued to drop.

The Hong Kong Monetary Authority said the rise in negative equity mortgage cases was “controllable” and urged people to brace for likely higher bank lending rates. The HKMA also said homebuyers should be prudent when making decisions about borrowing.

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