The composite interest rate rose to 1.28% at the end of October, from 1.18% at the end of September, the Monetary Authority says.

The increase reflected the carry-over effect from the upward adjustments of interbank rates in mid-September and early October that transmitted into the increases in customers' time deposit rates, which more than offset the fall in short- to medium-term interbank rates during October, while savings rates were unchanged.

In response to the market operations and measures the HKMA introduced to improve liquidity, local interbank rates have fallen in recent weeks. That may help ease the upward pressure on banks' funding costs, but global financial markets remain volatile. 

The authority said global financial market conditions will continue to influence the composite interest rate.