According to statistics published today (Monday) by the Hong Kong Monetary Authority, total deposits with authorized institutions grew by 2.7% in July 2020. Among the total, Hong Kong dollar deposits and overall foreign currency deposits rose by 4.2% and 1.1% respectively. Renminbi deposits in Hong Kong increased by 2.9% to RMB658.3 billion at the end of July. The total remittance of renminbi for cross-border trade settlement amounted to RMB588.5 billion in July, compared with RMB542.8 billion in June.
Total loans and advances increased by 1.7% in July. Among the total, loans for use in Hong Kong (including trade finance) increased by 2.4%, and loans for use outside Hong Kong edged up by 0.1%. The Hong Kong dollar loan-to-deposit ratio decreased to 85.0% at the end of July from 86.4% at the end of June, as Hong Kong dollar deposits increased at a faster pace than Hong Kong dollar loans.
In July, growth in deposits and loans were partly driven by initial public offering (IPO) activities. Excluding IPO loans and the resulting creation of deposits, total deposits and Hong Kong dollar deposits would have increased by 1.5% and 1.8% respectively in July, and total loans and advances would have edged up by 0.1% in July.
Hong Kong dollar M2 and M3 both picked up by 4.1% in July, and increased by 5.8% and 5.7% respectively compared to a year ago. The seasonally-adjusted Hong Kong dollar M1 rose by 3.0% in July, and expanded by 15.8% compared to a year ago, reflecting in part investment-related activities. Total M2 and M3 both grew by 2.6% in July, and rose by 6.7% and 6.6% respectively from a year earlier. Excluding deposits created by IPO loans, Hong Kong dollar M2 and M3 both would have picked up by 1.8% in July, and increased by 3.5% compared to a year ago. Total M2 and M3 both would have grown by 1.4% in July, and risen by 5.6% and 5.4% respectively compared to a year ago.
As monthly monetary statistics are subject to volatilities due to a wide range of transient factors, such as seasonal and IPO-related funding demand as well as business and investment-related activities, caution is required when interpreting the statistics.
Hong Kong Monetary Authority
31 August 2020