Monetary authority to start publishing quarterly composite banking interest rates

For the first time, the Monetary Authority of Macao (AMCM) has decided to start to publish the composite interest rates of the local banking sector for the pataca (MOP) and the Hong Kong dollar (HKD) quarterly.

Composite interest rates are measures of the average funding costs of Macau’s banking sector, which are the weighted average interest rates of all interest-bearing liabilities, including customer deposits, amounts due to banks, certificates of deposit and other debt instruments, and non-interest-bearing demand deposits on the banks’ books.

According to the AMCM in 2020 the composite interest rates for MOP and HKD fell from 0.87 per cent and 1.80 per cent in the first quarter to 0.66 per cent and 1.07 per cent in the fourth quarter, with respective drops of 21 basis points and 72 basis points, reflecting a general decline in funding costs of the local banking sector during the year.

The monetary authority believes that the regular compilation and dissemination of Macau’s composite interest rates could facilitate the financial sector to closely track movements in domestic funding costs and reinforce interest rate risk management of the banking system.

Domestic loans to the private sector increased by 3.1 per cent year-on-year by December, 2020 to MOP534.2 billion (US$66.8 billion), with external loans rising 15.2 per cent to some MOP639.1 billion.