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The composite interest rate fell to 2.96% at the end of April, from 3% at the end of March, the Monetary Authority says.
The four-basis-point fall in the average cost of funds in April mainly reflected the completion of a round of initial public offering activities and the subsequent reversal of short-term interbank rates to their lower levels, while savings deposit rates were unchanged.
The authority's Deputy Chief Executive Peter Pang said the composite interest rate has been steady in recent months, with only small variations reflecting changes in short-term interbank rates.
Given that a number of IPO activities are in the pipeline, the composite interest rate in the months ahead will continue to be affected by short-term changes in liquidity conditions due to these activities, he said.
Since US interest rates began increasing in the middle of 2004, the composite interest rate has grown by 272 basis points, compared with upward adjustments of between 275 basis points and 300 basis points in the best lending rates of banks by the end of April.
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