HONG KONG - Hong Kong's composite interest rate, which is a measure of the average cost of funds of banks, fell to 0.42 percent at the end of March from 0.45 percent at the end of February, the Hong Kong Monetary Authority (HKMA) said here Thursday.

The drop mainly reflected decreases in the weighted funding cost for deposits and interbank funds, HKMA said.

The composite interest rate is a weighted average interest rate of all Hong Kong dollar interest bearing liabilities, which include deposits from customers, amounts due to banks, negotiable certificates of deposit and other debt instruments, and Hong Kong dollar non-interest bearing demand deposits on the books of banks.