THE Hong Kong Monetary Authority adjusted the Base Rate downwards by 25 basis points to 3.5 percent yesterday, following the 25 basis points cut in the US federal funds target rate.

Joseph Yam, chief executive of the Monetary Authority, the city's de-facto central bank, told reporters yesterday that the US interest rate outlook is uncertain as the country's economic activities remain weak.

US economic growth in the past two quarters stood at only 0.6 percent, Yam said, adding its tight credit conditions and the deepening housing contraction are likely to weigh on economic growth.

He said local banks will decide whether or not they will follow suit.