Hong Kong Monetary Authority Sets 3.50% Interest Rate for Retail Infrastructure Bonds

The Hong Kong Monetary Authority (HKMA), representing the Hong Kong Special Administrative Region Government, has declared the interest rate for the second interest payment of its retail infrastructure bonds, due 2027, at 3.50% per annum. This announcement was made on December 3, 2025, aligning with the schedule outlined in the Issue Circular dated November 26, 2024.

Interest Rate Determination

The HKMA's decision on the interest rate was derived from a comparison between the Floating Rate and Fixed Rate applicable on December 3, 2025. The Floating Rate was recorded at 1.28%, while the Fixed Rate stood at 3.50%. Consequently, the higher rate, the Fixed Rate, was selected as the applicable interest rate for the bonds.

Details of the Retail Infrastructure Bonds

These retail infrastructure bonds, identified by Issue Number 03GB2712R and Stock Code 4286, form part of the Hong Kong Infrastructure Bond Programme. The second interest payment is scheduled for December 17, 2025. The bonds are designed to support various infrastructure projects within Hong Kong, providing investors with a stable return based on the prevailing market conditions.

Background and Context

The determination of the interest rate is influenced by multiple economic factors, including the year-on-year rates of change in the Composite Consumer Price Index (CPI). The CPI, based on the 2019/20 year, showed varying rates from May to October 2025, with an arithmetic average of 1.28%. This economic backdrop provides context for the interest rates set by the HKMA.

For further information, the original announcement can be accessed on the HKMA website.