Composite Interest Rate: End of July 2021

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19 Aug 2021

Composite Interest Rate: End of July 2021

The Hong Kong Monetary Authority (HKMA) announced today (19 August) the composite interest rate at the end of July 2021.1

The composite interest rate, which is a measure of the average cost of funds of banks, increased by 1 basis point to 0.19% at the end of July 2021, from 0.18% at the end of June 2021 (see Chart 1 in the Annex). The increase in composite interest rate mainly reflected an increase 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 July 2021 are available in the Monthly Statistical Bulletin on the HKMA website (


Hong Kong Monetary Authority
19 August 2021



Chart 1

End-of-period figures.


Chart 2

End-of-period figures.

1 The 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.

2 Since 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 August 2021