Hong Kong Monetary Authority Sets 2.50% Interest Rate for Retail Green Bonds

HKMA Announces Interest Rate for Green Bonds

The Hong Kong Monetary Authority (HKMA), representing the Hong Kong Special Administrative Region Government, has declared the interest rate for the fifth interest payment of its retail green bonds due in 2025. According to the HKMA, this interest rate has been set at 2.50% per annum, determined as the higher of the prevailing floating and fixed rates.

Details of the Interest Rate Determination

The retail green bonds, identified by Issue Number 03GR2505R and Stock Code 4252, are part of the Government Sustainable Bond Programme. The interest payment is scheduled for November 18, 2024. The HKMA's announcement on November 4, 2024, outlined the floating rate at 1.83% and the fixed rate at 2.50%, leading to the selection of the fixed rate as the applicable interest rate.

Background on Hong Kong's Green Bond Initiative

The retail green bonds are part of Hong Kong's broader initiative to promote sustainable finance. The Government Sustainable Bond Programme, formerly known as the Government Green Bond Programme, aims to support environmentally beneficial projects and initiatives. This series of bonds provides investors with the opportunity to contribute to sustainable development while receiving a fixed income.

Market Implications

The setting of the interest rate at 2.50% reflects the current economic conditions and inflation rates in Hong Kong. The Consumer Price Index, which indicates year-on-year rates of change, showed an arithmetic average of 1.83% from April to September 2024. This aligns with the HKMA's decision to choose the higher fixed rate for bondholders. For more detailed information, visit the official [Hong Kong Monetary Authority](https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/11/20241104-4/) website.