Monetary Statistics for May 1997

According to statistics published today (Friday, 27 June) by the Hong Kong Monetary Authority, deposits, loans and advances increased during May 1997. Table 1 summarises figures for May 1997 and comparisons with earlier months.

Deposits

Total deposits rose by 1.3% in May, having increased by 2.3% in April. HK$ deposits and foreign currency deposits increased by 1.6% and 0.9% respectively.

HK$ demand deposits fell by a modest 0.5%, after soaring by 8.7% in April. On the other hand, savings deposits were up by 4.2%, following an increase of 0.9% in the previous month, while time deposits grew by 0.9%, having increased by 4%. The sustained high level of demand deposits was in line with the continued vigour in asset markets during May, while the rise in time deposits reflected partly placements of new share subscription monies with banks before the refund dates.

US$ foreign currency deposits fell by 0.7% in May, after rising by 1.8% in the previous month, while non-US$ foreign currency deposits grew by 2.3%, reversing the fall of 0.5% in April. The latter's increase could be partly a result of the valuation effect of exchange rate changes, as the US dollar, to which the Hong Kong dollar is linked, depreciated against most other major currencies during the month.

Loans and Advances

Total loans and advances rose strongly by 5.2% in May, after an increase of 1.5% in April. Domestic credit expanded by 2.8%, with the growth of loans for trade financing picking up to 3.2% and other loans increasing by 2.8%. Offshore loans surged by 7.6% in May, having risen by a modest 0.1% in the previous month, partly due to the valuation effect stemming from a stronger Japanese yen.

Analyzed by currency, both HK$ and foreign currency loans rose during the month, by 2.9% and 6.8% respectively. As the expansion of HK$ loans was faster than that of HK$ deposits, the HK$ loan-to-deposit ratio rose to 110.2% at end-May, from 108.8% at end-April.

Money Supply

HK$M1 fell by 0.3% in May, as the fall in HK$ demand deposits of 0.5% more than offset the 0.2% rise in currency held by the public. HK$M2 and HK$M3 both expanded by 1.6% during the month. Compared to a year earlier, HK$M1, HK$M2 and HK$M3 rose by 18.4%, 24% and 23.8% respectively.

Hong Kong Monetary Authority
27 June 1997