Composite Interest Rate: End of August 2024
The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority (HKMA) announced today (September 20) the composite interest rate at the end of August 2024 (Note 1).
The composite interest rate, which is a measure of the average cost of funds of banks, decreased by 6 basis points to 2.52 per cent at the end of August 2024, from 2.58 per cent at the end of July 2024 (see Chart 1 in the Annex). The decrease in composite interest rate mainly reflected the decreases in the weighted funding cost for deposits and interbank funds during the month (see Chart 2 in the Annex) (Note 2).
The historical data of the composite interest rate from the end of the fourth quarter of 2003 to the end of August 2024 are available in the Monthly Statistical Bulletin on the HKMA website (www.hkma.gov.hk).
Note 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 per cent 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.
Note 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.
Consumer Price Indices for August 2024
The Census and Statistics Department (C&SD) released today (September 20) the Consumer Price Index (CPI) figures for August 2024. According to the Composite CPI, overall consumer prices rose by 2.5% in August 2024 over the same month a year earlier, the same as that in July 2024. Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite CPI (i.e. the underlying inflation rate) in August 2024 was 1.2%, also the same as that in July 2024.
On a seasonally adjusted basis, the average monthly rate of increase in the Composite CPI for the 3-month period ending August 2024 was 0.6%, the same as that for the 3-month period ending July 2024. Netting out the effects of all Government's one-off relief measures, the corresponding rates of increase were both 0.2%.
Analysed by sub-index, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 3.2%, 2.2% and 1.9% respectively in August 2024, as compared to 3.1%, 2.3% and 2.0% respectively in July 2024. Netting out the effects of all Government's one-off relief measures, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 1.1%, 1.2% and 1.3% respectively in August 2024, as compared to 1.0%, 1.2% and 1.4% respectively in July 2024.
On a seasonally adjusted basis, for the 3-month period ending August 2024, the average monthly rates of increase in the CPI(A), CPI(B) and CPI(C) were 0.8%, 0.5% and 0.4% respectively, same as those for the 3-month period ending July 2024. Netting out the effects of all Government's one-off relief measures, the average monthly rates of increase in the seasonally adjusted CPI(A), CPI(B) and CPI(C) for the 3-month period ending August 2024 were 0.2%, 0.1% and 0.2% respectively, and the corresponding rates of increase for the 3-month period ending July 2024 were all 0.2%.
Amongst the various components of the Composite CPI, year-on-year increases in prices were recorded in August 2024 for alcoholic drinks and tobacco (20.8%), electricity, gas and water (4.8%), housing (3.3%), transport (2.8%), meals out and takeaway food (2.4%), miscellaneous services (2.2%), miscellaneous goods (0.9%), and basic food (0.8%).
On the other hand, year-on-year decreases in the components of the Composite CPI were recorded in August 2024 for clothing and footwear (-1.8%), and durable goods (-0.9%).
Taking the first 8 months of 2024 together, the Composite CPI rose by 1.8% over a year earlier. The respective increases in the CPI(A), CPI(B) and CPI(C) were 2.2%, 1.7% and 1.6% respectively. The corresponding increases after netting out the effects of all Government's one-off relief measures were 1.0%, 0.9%, 1.1% and 1.3% respectively.
For the 3 months ending August 2024, the Composite CPI rose by 2.1% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 2.7%, 1.9% and 1.8% respectively. The corresponding increases after netting out the effects of all Government's one-off relief measures were 1.1%, 1.0%, 1.1% and 1.3% respectively.
For the 12 months ending August 2024, the Composite CPI was on average 2.0% higher than that in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 2.4%, 1.9% and 1.8% respectively. The corresponding increases after netting out the effects of all Government's one-off relief measures were 1.2%, 1.1%, 1.2% and 1.5% respectively.
Commentary
A Government spokesman said that underlying consumer price inflation remained modest in August. Prices of meals out and takeaway food increased at a moderated pace over a year earlier, and those of basic food inched up further. Prices of energy-related items continued to show visible decline. Price pressures on other major components remained broadly in check.
Looking ahead, overall inflation should stay mild in the near term. Domestic cost may face some moderate upward pressures as the Hong Kong economy continues to grow. External price pressures should moderate further in broad terms, though geopolitical tensions may pose uncertainties. The Government will continue to monitor the situation.
Further information
The CPIs and year-on-year rates of change at section level for August 2024 are shown in Table 1. The time series on the year-on-year rates of change in the CPIs before and after netting out the effects of all Government's one-off relief measures are shown in Table 2. For discerning the latest trend in consumer prices, it is also useful to look at the changes in the seasonally adjusted CPIs. The time series on the average monthly rates of change during the latest 3 months for the seasonally adjusted CPIs are shown in Table 3. The rates of change in the original and the seasonally adjusted Composite CPI and the underlying inflation rate are presented graphically in Chart 1.
More detailed statistics are given in the "Monthly Report on the Consumer Price Index". Users can browse and download this publication at the website of the C&SD (www.censtatd.gov.hk/en/EIndexbySubject.html?pcode=B1060001&scode=270).
For enquiries about the CPIs, please contact the Consumer Price Index Section of the C&SD (Tel: 3903 7374 or email: cpi@censtatd.gov.hk).
