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The Fed's latest plan to spend billions on securities is being hailed by investors desperate for economic salvation. But in Hong Kong it's causing headaches for policymakers worried about a frothy property market.
Officials in the southern Chinese financial centre said on Friday they were concerned about the local housing market overheating following the Federal Reserve's latest move to revive the U.S. economy.
Because Hong Kong's currency is pegged to the U.S. dollar, officials can't raise interest rates to cool the property market. Instead, they instead must follow U.S. monetary policy.
Officials announced tighter requirements on mortgage borrowers aimed at cooling the property market and protecting the banking sector.
Hong Kong house prices have surged because of low interest rates, easy credit and an influx of money from mainland China.
