Composite Interest Rate : End of November 2009

The Hong Kong Monetary Authority (HKMA) announced today (Thursday) the composite interest rate at the end of November 2009.¹

The composite interest rate, which is a measure of the average cost of funds of banks, dropped slightly by 2 basis points to 0.11% at the end of November 2009, from 0.13% at the end of October 2009 (see Chart 1 in the Annex). The composite rate was steady in October 2009. The fall in the composite interest rate in November 2009 reflected downward adjustments in time deposit rates and interbank rates (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 November 2009 are available in the Monthly Statistical Bulletin on the HKMA website (www.hkma.gov.hk). The next data release is scheduled for 19 January 2010 and will provide the composite interest rate at the end of December 2009.

For further enquiries, please contact:
Alice Lo, Communications Chief, at 2878 1480 or
Peggy Lo, Manager (Communications), at 2878 1687

Hong Kong Monetary Authority
17 December 2009

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.

² During November, time deposit rates with maturities longer than three months dropped by 0.25 to 3.75 basis points, while HIBORs dropped across-the-board by 0.03 to 21.7 basis points.

Annex

Chart 1

*End-of-period figures.

Chart 2

*End-of-period figures.