The Hong Kong Monetary Authority kept the base rate unchanged at 4.75% following the US Federal Reserve's decision to keep its rate target unchanged at between 4.25% to 4.5%.

HKMA's decision to keep the rate steady "is in line with market expectations," it said Thursday.

Various factors such as carry trades and supply-demand conditions contributed to the uncertain outlook faced by the Hong Kong dollar, the HKMA said.

"The extent and pace of future US interest rate cuts are subject to considerable uncertainty," Hong Kong's de facto central bank said.

Hong Kong's monetary policy has been in lockstep with the US Fed since 1983 to keep the Hong Kong dollar's exchange rate stable.

Bank of China (HKG:3988, SHA:601988) and HSBC's (HKG:0005) Hong Kong operations, as well as Hang Seng Bank (HKG:0011) kept their rates at 5.25%, while Standard Chartered Bank (HKG:2888) kept its rate at 5.5% per annum.

The Hang Seng Index inched up 1% in late morning trading.