The Hong Kong Monetary Authority (HKMA) announced today (Thursday) the composite interest rate at the end of June 2008.1
The composite interest rate, which reflects the average cost of funds of banks, rose by 10 basis points to 0.85% at the end of June 2008, from 0.75% at the end of May 2008 (see Chart 1 in the Annex). This followed a decrease of 4 basis points in May 2008. The mild increase in the composite interest rate in June 2008 reflected upward adjustments of time deposit and interbank rates, while savings deposit rates were unchanged (see Chart 2 in the Annex).2
"Having risen in June, interbank rates were steady in the past two weeks, as expectations of an imminent interest rate increase by the US Federal Reserve receded. Looking ahead, the composite interest rate will continue to be influenced by changes in US interest rates and global financial market conditions," said Mr Peter Pang, Deputy Chief Executive of the HKMA.
The historical data of the composite interest rate from the end of the fourth quarter of 2003 to the end of June 2008 are available in the Monthly Statistical Bulletin on the HKMA website (www.hkma.gov.hk). The next data release is scheduled for 19 August 2008 and will provide the composite interest rate at the end of July 2008.
For further enquiries, please contact:
Hing-fung Wong, Manager (Press), at 2878 1802 or
Lilian Goh, Officer (Press), at 2878 8246
Hong Kong Monetary Authority
17 July 2008
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.