Hong Kong Monetary Authority Sets Interest Rate for Silver Bond Series Due 2026

Interest Rate Announcement for Silver Bond Series

The Hong Kong Monetary Authority (HKMA), representing the Hong Kong Special Administrative Region Government, has disclosed the per annum interest rate for the third interest payment of the Silver Bond Series due 2026. This announcement, made on February 4, 2025, is part of the Government's Retail Bond Issuance Programme.

According to the HKMA, the Silver Bond Series, designated with Issue Number 03GB2608R, will see its third interest payment on February 18, 2025. The interest rate is to be determined as the higher value between the prevailing Floating Rate and Fixed Rate.

Interest Rate Determination

On the announcement date, the HKMA reported that the Floating Rate was set at +1.90%, while the Fixed Rate was determined at +5.00%. Consequently, the third interest payment rate has been set at 5.00% per annum, favoring the Fixed Rate over the Floating Rate.

Context of Interest Rates

This decision reflects the broader economic indicators, including the year-on-year rates of change in the Composite Consumer Price Index for the latter half of 2024. Notably, the rates for July and August 2024 were at +2.50%, while the following months saw a decline, with December 2024 recording a +1.40% change. The arithmetic average for these months was calculated to be +1.90%, aligning with the Floating Rate.

The Silver Bond Series is part of the Hong Kong Government's initiative to provide stable investment returns for its citizens, particularly senior residents. These bonds are designed to offer a secure investment option with guaranteed interest payments.

For further details, the official announcement can be accessed on the Hong Kong Monetary Authority website.