Silver Bond sixth interest payment set at 5.00 percent
The Hong Kong Monetary Authority announced that the sixth interest payment for the Silver Bond Series due 2026 will carry a rate of 5.00 percent per annum. The payment will be made on August 18, 2026.
Fixed floor guarantees five percent return
The Hong Kong Monetary Authority, acting on behalf of the HKSAR Government, fixed the annual interest rate for Issue Number 03GB2608R under the Retail Bond Issuance Programme at 5.00 percent per annum.
Under the terms set out in the Issue Circular from July 2023, the payout is calculated as the higher of the prevailing floating rate and fixed rate.
For this sixth interest payment, the floating rate was calculated at 1.70 percent, derived from the arithmetic average of year-on-year changes in the Composite Consumer Price Index between January and June 2026.
Because the pre-determined fixed rate of 5.00 percent exceeded the floating rate, the fixed rate applies in full for the August payment.
Inflation trails fixed rate guarantee
The underlying inflation numbers reflect moderate price growth across Hong Kong during the first half of 2026.
Monthly Composite Consumer Price Index data recorded 1.10 percent in January, rising to 1.70 percent through February, March, and April, before reaching 2.00 percent in May and June.
The resulting six-month arithmetic average of 1.70 percent highlights how retail inflation remained well below the 5.00 percent floor, granting senior investors a notable real return on their holdings.
Generous floor buffers retail investors
The gap between 1.70 percent inflation and the 5.00 percent payout highlights the heavy subsidy in government retail bonds.
While beneficial for seniors, such high minimum floors burden public funds during quiet inflation periods.
Future issuances should align minimum guarantees closer to economic reality.