The composite interest rates for the pataca and the Hong Kong dollar fell from 0.87 percent and 1.80 percent in the first quarter of 2020 to 0.66 percent and 1.07 percent in the fourth quarter, the Macau Monetary Authority (AMCM) said in a statement yesterday.
This was the first time for Macau to release such figures, according to the statement.
The composite interest rates for the pataca and the Hong Kong dollar dropped 21 basis points and 72 basis points respectively, reflecting a general decline in the funding costs of the local banking sector during the year, according to Macau’s quasi-central bank.
The regulator said it started compiling the composite interest rates of Macau’s banking sector for the pataca and the Hong Kong dollar in 2020 to enhance the interest rate formation mechanism of the local money market.
Macau’s composite interest rates are measures of the average funding costs of its banking sector, which are the weighted average interest rates of all interest-bearing liabilities, including customer deposits, amounts due to banks, certificates of deposit and other debt instruments, and non-interest-bearing demand deposits on the banks’ books, the statement pointed out.
Regular compilation and dissemination of Macau’s composite interest rates will facilitate the financial sector to closely track movements in domestic funding costs, thus reinforcing interest rate risk management of the banking system, the authority said, adding that the composite interest rates will be released on a quarterly basis from now on.
The Hong Kong Monetary Authority (HKMA) describes the composite interest rate as a measure of the average cost of funds of banks. – Xinhua, MPD
