According to statistics published today (January 29, 1999) by the Hong Kong Monetary Authority (HKMA), total deposits increased in December while total loans and advances declined. Table 1 provides a summary and comparison with earlier months.
Deposits
Total deposits rose by 1.0% in December. Both Hong Kong dollar deposits and foreign currency deposits increased, by 0.8% and 1.4% respectively. The share of HK$ deposits in total deposits dropped marginally to 57.1% at end-December from 57.2% at end-November.
Among HK$ deposits, demand deposits decreased by 3.1% during the month. However, savings deposits grew for the fourth consecutive month by 3.6% and time deposits also increased by 0.2% in December. The continued strong depositors* appetite for savings deposits in part reflected the narrowing of the interest rate spread between the short-term time deposit rate and the savings deposit rate.
Foreign currency deposits grew by 1.4% in December. Of the total, US$ deposits decreased by 2.6%, while non-US$ foreign currency deposits rose by 7.1%. The latter was partly due to valuation effects from a weaker US dollar in December.
Loans and advances
During the month, total loans and advances decreased by 0.7%. Both domestic loans and offshore loans shrank, by 1.0% and 0.2% respectively. Among domestic loans, loans for trade financing contracted further by 3.4%, while loans for other uses declined by 0.8%. As HK$ deposits increased but loans decreased, the HK$ loan-to-deposit ratio fell to 100.6% at end-December, from 101.7% at end-November.
Quarterly analysis of loans for use in Hong Kong by major economic sector
During the December quarter, domestic loans contracted further by 2.3%, following a drop of 1.9% in the previous quarter. Lending to the manufacturing sector and loans for trade financing contracted by 6.3% and 8.9% respectively. In line with the slack performance in retail sales, loans for wholesale and retail trades dropped by 5.0% in the December quarter, having declined by 4.1% in the September quarter. Amidst weak investment sentiment, lending to stockbrokers and financial concerns fell by 29.7% and 2.2% respectively during the quarter. Likewise, loans for building, construction and property development and investment declined further by 3.7%, after a 2.1% fall in the September quarter. Nevertheless, residential mortgage loans and electricity, gas and telecommunication-related lending increased by 3.2% and 1.5% respectively in the fourth quarter of 1998.
Money supply
HK$M1 declined by 0.4% in December, as the 3.1% decrease in demand deposits outweighed the 3.0% growth in cash held by the public arising from the seasonal demand for currency for year-end sales. Both HK$M2 and HK$M3 were up by 0.8% during the month. In the twelve months to December, HK$M1 fell by 5.2%, while HK$M2 and HK$M3 grew by 9.9% and 9.4% respectively.
Release calendar
As a further step to enhance the transparency of economic statistics and to meet international standards, we are announcing below the release calendar of monetary statistics for 1999.
(table 1 & 2)
