Composite Interest Rate : End of February 2010

The Hong Kong Monetary Authority (HKMA) announced today (Thursday) the composite interest rate at the end of February 2010.¹

The composite interest rate, which is a measure of the average cost of funds of banks, continued to remain steady at 0.11% at the end of February 2010 (see Chart 1 in the Annex), after staying unchanged in January 2010. During February, HIBORs decreased slightly, while time deposit rates remained steady (see Chart 2 in the Annex).²

The historical data of the composite interest rate from the end of the fourth quarter of 2003 to the end of February 2010 are available in the Monthly Statistical Bulletin on the HKMA website (www.hkma.gov.hk). The next data release is scheduled for 19 April 2010 and will provide the composite interest rate at the end of March 2010.

For further enquiries, please contact:
Peggy Lo, Manager (Communications), at 2878 1687 or
Yokee Wong, Manager (Communications), at 2878 1213

Hong Kong Monetary Authority
18 March 2010

¹ The composite interest rate is a weighted average interest rate of all Hong Kong dollar interest bearing liabilities, which include deposits from customers, amounts due to banks, negotiable certificates of deposit and other debt instruments, and Hong Kong dollar non-interest bearing demand deposits on the books of banks. Data from retail banks, which account for about 90% of the total customers' deposits in the banking sector, are used in the calculation. It should be noted that the composite interest rate represents only average interest expenses. There are various other costs involved in the making of a loan, such as operating costs (e.g. staff and rental expenses), credit cost and hedging cost, which are not covered by the composite interest rate.

² One-month HIBOR dropped by 0.9 basis point while those with maturities of six months or longer decreased by 1.9 to 3.9 basis points.

Annex

Chart 1

^*End-of-period figures.

Chart 2

^*End-of-period figures.