The composite interest rate fell to 2.22% at the end of November from 3.25% at the end of October, the Monetary Authority says.

Following a decrease of nine basis points in October, the 103-basis-point fall in Novermber's composite interest rate was largely due to the downward adjustments in savings and time deposit rates, as well as interbank interest rates.

The reduction in the average cost of funds in November was attributed to cuts in customer deposit rates following market operations by the authority near the end of October. It led to the substantial easing of the previously tight interbank liquidity conditions and the subsequent increase in the aggregate balance of the banking system.

Given the rising volatilities in global financial markets the composite interest rate will continue to be influenced by short-term changes in liquidity conditions, the authority's Deputy Chief Executive Peter Pang said.