Hong Kong Monetary Authority Announces 5.00% Interest Rate for Silver Bond Series Due 2026

The Hong Kong Monetary Authority (HKMA), representing the Hong Kong Special Administrative Region Government, has announced the annual interest rate for the second interest payment of the Silver Bond Series due 2026. According to the HKMA, the interest rate has been set at 5.00% per annum.

Details of the Interest Rate Announcement

The announcement, made on August 5, 2024, follows the guidelines outlined in the Issue Circular dated July 14, 2023. The Silver Bond Series, identified by Issue Number 03GB2608R, is part of the Retail Bond Issuance Programme under the Government Bond Programme.

The second interest payment for the bonds is scheduled for August 19, 2024. The relevant interest rate was determined by comparing the prevailing Floating Rate and Fixed Rate as of August 5, 2024. The rates were as follows:

Since the Fixed Rate of 5.00% was higher than the Floating Rate of 1.60%, the interest rate for the second payment was set at 5.00% per annum.

Context and Implications

The Silver Bond Series is designed to provide a secure investment option for Hong Kong residents, particularly the elderly. The bonds offer a stable interest income, which is especially significant in a fluctuating economic environment. The determination of the interest rate at a competitive 5.00% highlights the government's commitment to providing attractive investment opportunities to its citizens.

The interest rate announcement comes amid a backdrop of various economic indicators. According to the Composite Consumer Price Index (CPI) for 2024, the year-on-year rates of change ranged from +1.10% to +2.10% across different months, with an arithmetic average of +1.60%. These figures were considered in setting the Floating Rate.

For more information, please refer to the official HKMA press release.