The Monetary Authority has adjusted the Base Rate downward to 0.5% following the US Federal Reserve's decision to cut the US federal funds target rate.

Since the US federal funds target rate is reduced to the range of 0% to 0.25% and federal funds are effectively trading at 0%, the Base Rate is set at 50 basis points above the lower boundary of the target range at 0.5%, the authority said.

The authority's chief executive Joseph Yam said the body has injected $36 billion into the banking system in the last four trading days. He called on banks to make use of the more relaxed monetary policy to support the economy.