CONFIDENTIAL #2 機密
narrowing of the trade deficit and the tendency to surplus in the rest
of the overseas transactions, which would have automatically increased
the money supply were the rate fixed, tended to appreciate the Hong
Kong dollar instead. The public s ctors surplus reduced, to a small
extent, the stock of money in the hands of the private sector.
37.
supply M1
After remaining fairly constant all through 1974, the money
began to increase in 1975. It continued to grow in 1976
At the end of 1976, M1 at HK 16,026 million
was 18% higher than a year ago. The more widely defined money supply
with some acceleration.
+
M2 at the end of 1976 was HK$48,413 million, 21% higher than a year
ago. The higher growth in M2 is consistent with past patterns in the
growth of these two measures of the money supply. Between 1961 and
1970, while M1 was increasing at an average annual rate of 12%, M2 was
increasing at 17p. M1 tends to reflect more closely movements in the
economy. M1 increased more rapidly than 2 during the stock exchange
boom in 1972 and early 1973 and decreased more markedly thereafter.
In 1976 while M1 slightly acceler..ted towards the latter part of the
year, the rate of growth in M2 was more stable.
[
Table 18, Diagram 5 J
* M1 is defined as notes and coins held by the non-bank
private sector and their demand deposits, together
with those of the public sector.
M2 is the sum of M1 and savings and time deposits held by the non-bank private and public sectors.
G.F. 323
CONFIDENTIAL
17.