The city’s de-facto central bank on Monday lowered its countercyclical capital buffer imposed on banks to 1% from 2%. That came after it also reduced its base rate by 64 basis points to 0.86%, hours after the U.S. Federal Reserve cut its by 100 basis points, in the second reduction this month by both monetary authorities.

The lower buffer frees up about HK$500 billion to support lending, the authority’s chief executive, Eddie Yue, said at a press briefing late Monday, adding that there’s scope to reduce it further.

Hong Kong, which has pegged its currency to the U.S. dollar, typically mirrors move by U.S. policy makers to keep the link stable, but the easing will also help an economy that’s headed for its second annual contraction and where unemployment is soaring. Central banks worldwide are stepping up monetary stimulus to counter the effects of the coronavirus, which has become a pandemic.

HKMA will meet with banks and businesses early next week to further talk about relief measures to support economy, he said. Hong Kong’s financial system is resilient and well-capitalized, Yue said.

Hong Kong’s banks aren’t obliged to follow with lower borrowing costs, though any support would likely be welcomed by local businesses. The city’s economy has been battered by months of unrest and the virus outbreak, while the local equity benchmark entered a bear market on Friday.

HSBC Holdings Ltd. on Monday announced it would make no changes to its prime lending rate, after last year cutting it for the first time in 11 years.