**********************************************
The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority (HKMA) announced today (January 19) the composite interest rate at the end of December 2009.*
The composite interest rate, which is a measure of the average cost of funds of banks, remained steady in December 2009 at 0.11% (see Chart 1 in the Annex). This followed a decline of 2 basis points in November 2009. During December 2009, interbank rates rose marginally and the movements of time deposit rates were mixed (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 December 2009 are available in the Monthly Statistical Bulletin on the HKMA website ( www.hkma.gov.hk ). The next data release is scheduled for February 22, 2010 and will provide the composite interest rate at the end of January 2010.
* 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.
** During December, HIBORs for funds with maturities of one month or longer rose by 2 to 12 basis points.
For further enquiries, please contact:
Peggy Lo, Manager (Communications), at 2878 1687 or
Natalie Wu, Officer (Communications), at 2878 8246
Ends/Tuesday, January 19, 2010
Issued at HKT 16:32
NNNN
