Monetary Statistics for November 1997

According to statistics published today (30th December) by the Hong Kong Monetary Authority, total deposits as well as loans and advances fell during November 1997. Table 1 gives a summary and comparisons with earlier months.

Deposits

Total deposits declined by 1.3% in November, having decreased by 0.7% in the previous month. HK$ deposits fell by 1.1% while foreign currency deposits were down by 1.6%.

During the month, HK$ demand deposits dropped sharply, by 12%, after a decline of 1.9% in October, while time deposits fell by a modest 0.9%. On the other hand, savings deposits rebounded by 2.5%, having decreased continuously from July to October. The significant reduction in demand deposits was partly attributable to the weak asset markets amid the turbulence in Asian financial markets, as the transactions demand for money fell.

The fall in foreign currency deposits was attributable primarily to a decline of 7.2% in non-US$ foreign currency deposits, which more than offset a rise of 4.1% in US$ deposits. The former 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, appreciated against most other major currencies during the month.

Loans and advances

Total loans and advances dropped by 2% in November, after decreasing by 0.2% in October. The fall was across-the-board, with offshore loans declining by 3.9%, due partly to the valuation effect of a strong US dollar, while domestic credit contracted by a 0.3% along with the downturn of asset markets. Of the local loans, loans for trade financing fell for four months in a row, being down by 1.5% in November, while other loans dropped slightly by 0.1%, having decreased by 0.9% in the previous month.

During November, HK$ loans registered a drop of 1.2%, having decreased by 2.3% in October, while foreign currency loans fell by 2.6%, after a rise of 1.4%. As HK$ deposits and loans contracted at about the same pace, the HK$ loan-to-deposit ratio was virtually unchanged at 113.9% at end-November.

Money supply

All monetary aggregates fell in November, with HK$M1 declining by 7.4%, HK$M2 by 0.6% and HK$M3 by 0.7%. In the twelve months to November, HK$M1 dropped by 1.2% while the growth of HK$M2 and HK$M3 decelerated to 7.9%, due partly to the high base of comparison in November 1996 when deposits and money supply were boosted by new share flotations.

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 December 1997

MONETARY STATISTICS -- Nov 1997
(HK$mn)

* 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