The composite interest rate fell from 3.03% in October to 3.02% in November, the Monetary Authority says.

The one basis-point drop in the average cost of funds reflected the decline in savings and time deposit rates, which offset the significant rise in short-term interbank rates due to the initial public offering activities near the end of the month.

The authority's Deputy Chief Executive Peter Pang said the average cost of funds has been steady over the past few months.

"Although short-term interbank rates were up significantly around the end of November due to initial public offering activities, they have eased back since early December, indicating that liquidity in the banking system remains ample."

Since the commencement of the current up-cycle of US interest rates started in mid-2004, the composite interest rate has grown by 278 basis points, compared with the upward adjustments of between 275 basis points and 300 basis points in the best lending rates of banks up to the end of November.