Hong Kong’s Composite Interest Rate Drops Amid Economic Adjustments
The Hong Kong Monetary Authority (HKMA) has cut the composite interest rate to 1.26% at the end of June 2025, down 35 basis points from May's 1.61%. The decline reflects lower funding costs for retail banks, which hold 90% of customer deposits in the sector.
This benchmark rate measures the average cost of interest-sensitive liabilities but excludes operational and credit risk expenses. Starting July 2025, the HKMA will modify its publication methodology for the indicator.