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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority (HKMA) announced today (October 19) the composite interest rate at the end of September 2010.*
The composite interest rate, which is a measure of the average cost of funds of banks, declined by 2 basis points to 0.18% at the end of September 2010, from 0.20% at the end of August 2010 (see Chart 1 in the Annex). During September, HIBORs rose slightly**, while weighted deposit rates dropped moderately (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 September 2010 are available in the Monthly Statistical Bulletin on the HKMA website (www.hkma.gov.hk). The next data release is scheduled for November 18, 2010 and will provide the composite interest rate at the end of October 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 September, HIBORs rose across-the-board by 4.1 to 10.0 basis points.
Ends/Tuesday, October 19, 2010
Issued at HKT 16:40
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