Hong Kong Monetary Authority - Composite Interest Rate: End of August 2012

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19 Sep 2012

Composite Interest Rate: End of August 2012

The Hong Kong Monetary Authority (HKMA) announced today (Wednesday) the composite interest rate at the end of August 2012.¹

The composite interest rate, which is a measure of the average cost of funds of banks, fell slightly by 1 basis point to 0.39% at the end of August 2012, from 0.40% at the end of July 2012 (see Chart 1 in the Annex). The decline in the composite interest rate in August mainly reflected decreases in the weighted funding costs for both deposits and interbank funds (see Chart 2 in the Annex).

The historical data of the composite interest rate from the end of the fourth quarter of 2003 to the end of August 2012 are available in the Monthly Statistical Bulletin on the HKMA website (www.hkma.gov.hk). The next data release is scheduled for 18 October 2012 and will provide the composite interest rate at the end of September 2012.

Hong Kong Monetary Authority
19 September 2012

¹The 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.

Annex

Chart 1

Annex-Chart1

End-of-period figures.

Chart 2

Annex-Chart2

End-of-period figures.

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