Hong Kong Monetary Authority Sets 4.00% Interest Rate for Silver Bond Series

The Hong Kong Monetary Authority (HKMA), acting on behalf of the Hong Kong Special Administrative Region Government, has announced the annual interest rate for the fourth interest payment of the Silver Bond Series due 2025. This rate is part of the Retail Bond Issuance Programme under the Government Bond Programme, according to the HKMA.

Interest Rate Announcement

According to the Issue Circular dated 9 August 2022, the fourth interest payment for the Silver Bond Series (Issue Number 03GB2509R) is scheduled for 16 September 2024. The interest rate was determined based on the higher of the prevailing Floating Rate and Fixed Rate as of 2 September 2024.

Determined Rates

On 2 September 2024, the HKMA reported the following rates:

Based on these rates, the interest rate for the fourth interest payment has been set at 4.00% per annum.

Context and Implications

The Silver Bond Series is part of Hong Kong’s efforts to provide stable investment options for its residents, particularly the elderly. By offering a fixed interest rate of 4.00%, the government aims to ensure predictable returns amidst fluctuating market conditions. The floating rate, derived from the Composite Consumer Price Index, was calculated at 1.73% based on year-on-year changes from February to July 2024.

The fixed rate of 4.00% reflects the government's intention to provide a more appealing and secure investment to bondholders, especially in an economic environment where inflation rates and other economic indicators are in flux.

For more details, visit the Hong Kong Monetary Authority.