To enhance the interest rate formation mechanism of the local money market, the Monetary Authority of Macao (AMCM) started compiling the composite interest rates of Macao’s banking sector for the pataca (MOP) and the Hong Kong dollar (HKD) in 2020.

The composite interest rates of Macao are measures of the average funding costs of Macao’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.  In 2020, the composite interest rates for MOP and HKD fell from 0.87% and 1.80% in the first quarter to 0.66% and 1.07% 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.

Regular compilation and dissemination of Macao’s composite interest rates would facilitate the financial sector to closely track movements in domestic funding costs, thus reinforcing interest rate risk management of the banking system. The AMCM will hereafter release the composite interest rates on a quarterly basis.