Monetary Statistics for July 1997

According to statistics published today (Friday, 29 August) by the Hong Kong Monetary Authority, the growth of deposits and loans and advances both moderated during July 1997. Table 1 gives a summary and comparisons with earlier months.

Deposits

The rise of total deposits slowed to 0.5% in July, from 1.1% in June. The increase was mainly contributed by a 1.8% rise in HK$ deposits, which more than compensated for a fall of 1.4% in foreign currency deposits.

During the month, HK$ demand deposits surged by 4.1%, after declining by 2.7% in June, while time deposits continued to grow by 3%, having increased by 3.4% in the previous month. On the other hand, savings deposits declined by 2.1%, following a rise of 1.9% in the previous month. The rise in time deposits was partly due to the offering of higher deposit rates by banks to attract Hong Kong dollar funds in response to higher interbank rates.

US$ foreign currency deposits rose by a modest 0.5% in July, after decreasing by 1.2% in the previous month, while non-US$ foreign currency deposits declined markedly by 3.1%, following a fall of 0.6% in June. The fall of non-US$ foreign currency deposits was largely due to the valuation effect stemming from a stronger US dollar, to which the Hong Kong dollar is linked.

Loans and advances

Total loans and advances fell by 0.6% in July, having increased by 2.4% in June. Domestic credit expansion slowed for four months in a row to 1.3% in July, as both loans for trade financing and other local loans grew more moderately in the month. Meanwhile, offshore loans fell by 2.5%, having increased by 3.3% in the previous month.

Analyzed by currency, HK$ loans were up by 1.9% in July while foreign currency loans decreased by 2.2%. As the expansion of HK$ loans was marginally faster than that of HK$ deposits, the HK$ loan-to-deposit ratio edged up from 107.6% at end-June to 107.7% at end-July.

Money supply

HK$M1 picked up by 1.5% in July, as the increase in HK$ demand deposits more than offset the 2.6% fall in currency held by the public. HK$M2 and HK$M3 expanded by 1.7% during the month. Compared to a year earlier, HK$M1, HK$M2 and HK$M3 rose by 14.9%, 25.0% and 24.7% 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
29 August 1997