Composite Interest Rate: End of October 2020

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19 Nov 2020

Composite Interest Rate: End of October 2020

The Hong Kong Monetary Authority (HKMA) announced today (Thursday) the composite interest rate at the end of October 2020.1

The composite interest rate, which is a measure of the average cost of funds of banks, decreased by 7 basis points to 0.29% at the end of October 2020, from 0.36% at the end of September 2020 (see Chart 1 in the Annex). The decrease in composite interest rate mainly reflected decreases in the weighted funding cost for deposits during the month (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 October 2020 are available in the Monthly Statistical Bulletin on the HKMA website (


Hong Kong Monetary Authority
19 November 2020



Chart 1

End-of-period figures.


Chart 2

End-of-period figures.

1The composite interest rate is a weighted average interest rate of all Hong Kong dollar interest-rate-sensitive liabilities, which include deposits from customers, amounts due to banks, negotiable certificates of deposit and other debt instruments, and all other liabilities that do not involve any formal payment of interest but the values of which are sensitive to interest rate movements (such as 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.

2Since June 2019, the composite interest rate and weighted deposit rate have been calculated based on the new local “Interest rate risk in the banking book” (IRRBB) framework. As such, these figures are not strictly comparable with those of previous months.

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Last revision date : 19 November 2020