Monetary Statistics for March 1997

According to statistics published today (Wednesday, 30 April) by the Hong Kong Monetary Authority, deposits, loans and advances decreased during March 1997. Table 1 summarises figures for March 1997 and comparisons with earlier months.

Deposits

Total deposits fell by 1.3% in March, reversing the rise of 2.8% in February. Both HK$ deposits and foreign currency deposits decreased, by 2.2% and 0.1% respectively.

The decline in HK$ deposits was across-the-board, including demand, savings and time deposits. The fall in time deposits was partly due to the high base of comparison in February, when such deposits were boosted by placements of new share subscription monies before the refund dates.

The fall in foreign currency deposits was due primarily to a decrease of 1.8% in US$ deposits, which more than offset an increase of 1.5% in non-US$ foreign currency deposits.

Loans and Advances

Total loans and advances fell by 2.5% in March, reversing the rise of 2.6% in February. Domestic credit decreased by 0.6%, as the small rise of 0.1% in loans for trade financing was outweighed by the 0.6% decline in other loans for use in Hong Kong. The fall in the latter was, however, partly the result of the high base of comparison at end-February, which was up-lifted by loans for new share subscription. Offshore loans dropped by 4.3% in March, following an increase of 0.7% in the previous month, partly due to the valuation effect arising from the weakening of the Japanese yen during the month.

Analyzed by currency, both HK$ loans and foreign currency loans fell during the month, by 1.4% and 3.2% respectively. As the decline in HK$ loans was more moderate than that of HK$ deposits, the HK$ loan-to-deposit ratio edged up to 109.1% at end-March, from 108.2% at end-February.

Quarterly Analysis of Loans for Use in Hong Kong by Major Economic Sector

Loans for use in Hong Kong grew by 8.0% in the March quarter of 1997, compared with the 4.6% rise in the December quarter of 1996. Residential mortgage loans and other property-related lending surged further during the quarter, by 7% and 9.8% respectively, along with the buoyant property market. Likewise, loans to financial concerns and stock-brokers recorded notable growths of 12.5% and 15.5% respectively, while loans for wholesale and retail trade increased by 6.7%. On the other hand, in line with the slack external trade performance, loans for trade financing dropped by 0.4% in the March quarter, while lending to the manufacturing sector continued to grow slowly by 3.7%.

Money Supply

HK$M1 fell by 4.6% in March, as HK$ demand deposits dropped by 6.5% and currency held by the public fell by 1.8%. Likewise, HK$M2 and HK$M3 contracted by 2.2% and 2.1% in March, reflecting partly the high base of comparison in February. Compared to a year earlier, HK$M1, HK$M2 and HK$M3 rose by 13.2%, 18.5% and 18.4% respectively.

Note to Editor

For enquiries, please contact the Press and Publications Section, Hong Kong Monetary Authority, at telephone 2878 8261.

Hong Kong Monetary Authority
30 April 1997

* Adjusted to exclude foreign currency swap deposits.
@ Adjusted to include foreign currency swap deposits.
# Including those where place of usage is unknown.

Note : Data may not add up to total due to rounding.

# With the introduction of the new Return on Loans and Advances and Provisions (as revised from the Return on Loans and Advances for Use in Hong Kong) as from December 1994, a number of AIs have reclassified certain components. As a result, the figures are not strictly comparable with those of previous quarters. The percentage changes given above have been adjusted, so far as possible, to remove the reclassification effect and therefore cannot be calculated directly from the published figures.
* This excludes funds advanced to authorized institutions.