The composite interest rate in Hong Kong fell to 0.69 percent at the end of December, 2008, from 0.86 percent at the end of November in 2008, Hong Kong Monetary Authority said on Monday.

Following a fall of 42 basis points in November, the 18-basis-point fall in the December composite interest rate reflected drops in interbank and time-deposit rates, the authority said.

"The ample liquidity in the interbank market, following the substantial increase in the aggregate balance of the banking system and subsequently the fall in interbank rates, has led to the consecutive decline in banks' average cost of funds," Hong Kong Monetary Authority Deputy Chief Executive Peter Pang said.

He expected the composite interest rate will continue to be affected by domestic liquidity and global financial market conditions.

In December of 2008, local interbank offering rates fell 35 to 105 basis points across the board.

Source: Xinhua