
	2019			2018			2017
	US$M			US$M			US$M
Financial expenses
Interest expense using the effective interest rate method:
Interest on bank loans, overdrafts and all other borrowings		1,296			1,168			1,130
Interest capitalised at 4.96% (2018: 4.24%; 2017: 3.25%) ⁽¹⁾		(248	)		(139	)		(113	)
Interest on finance leases		47			59			33
Discounting on provisions and other liabilities		470			414			450
Other gains and losses:
Fair value change on hedged loans		729			(265	)		(1,185	)
Fair value change on hedging derivatives		(809	)		329			1,244
Exchange variations on net debt		6			(19	)		(23	)
Other		19			20			24

Total financial expenses		1,510			1,567			1,560

Financial income
Interest income		(446	)		(322	)		(143	)

Net finance costs		1,064			1,245			1,417

⁽¹⁾

Interest has been capitalised at the rate of interest applicable to the specific borrowings financing the assets under construction or, where financed through general borrowings, at a capitalisation rate representing the average interest rate on such borrowings. Tax relief for capitalised interest is approximately US$74 million (2018: US$42 million; 2017: US$34 million).