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The composite interest rate rose to 3.09% at the end of June, from 3% at the end of May, the Monetary Authority says.
The nine-basis-point increase in the average cost of funds in June was mainly attributed to the temporary tightening of short-term liquidity conditions in the interbank market, which was brought about by a series of initial public offerings near the end of the month, the authority's Deputy Chief Executive Peter Pang said.
It is expected that the composite interest rate will continue to be affected by short-term changes in liquidity conditions, he said.
Short-term interbank rates increased during June, while longer term interbank rates fell and savings deposit rates were unchanged.
Since US interest rates began increasing in the middle of 2004, the composite interest rate has increased by 285 basis points, compared with upward adjustments of between 275 basis points and 300 basis points in the best lending rates of banks by the end of June.
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