HSBC Holdings Plc, BOC Hong Kong (Holdings) Ltd, Hang Seng Bank Ltd, Standard Chartered Plc and Bank of East Asia Ltd have cut their best Hong Kong lending rates.

The move follows reductions by the United States Federal Reserve and the city's de facto central bank.

HSBC, Europe's biggest bank, BOC Hong Kong and Hang Seng Bank trimmed the rates they charge on loans to their biggest customers by 25 basis points to 7.5 percent, effective today. One basis point is 0.01 percentage point. Standard Chartered and Bank of East Asia cut their rates by a quarter-point to 7.75 percent, Bloomberg News reported.

The reductions by five of Hong Kong's largest banks may add fuel to an economy that grew 6.9 percent in the second quarter. The city's benchmark stock index closed above 25,000 for the first time yesterday, paced by real-estate developers, on optimism that lower borrowing costs will boost property prices.

"The cut will be good for Hong Kong's economy and property," Kelvin Lau, an economist at Standard Chartered Plc, said.

The Hong Kong Monetary Authority cut its base rate for overnight lending by a half point to 6.25 percent earlier yesterday, following a similar reduction by the Fed.

The Hong Kong dollar is pegged to the greenback, which means the city typically follows any change in US rates. Hong Kong's interbank loan rate rose to 4.97 percent on September 6, the highest since April 2001.