valuation effect of the depreciation of the Hong Kong
dollar, thus making interpretation difficult.
Total money
supply on the broadest definition, total M3, increased by
9.9% during the third quarter but probably most of this
increase reflects the effect on the foreign currency
component of the depreciation of the Hong Kong dollar, by
12.2% against the US dollar, over this period. The
increase in total M3 during the second quarter had been
smaller, at 3.9%, but the
the extent of the depreciation of
the Hong Kong dollar during that period was also less.
These figures suggest that the underlying growth rate of
total money supply during the third quarter was moderate.
Because of the popularity of swap deposits, which are in
effect Hong Kong dollar deposits (although denominated in
foreign currencies), the true growth rates of Hong Kong
dollar M2 and M3 were probably higher than indicated by the money supply figures (4).
3.4
Stability of the exchange value of the Hong Kong
dollar in July, which turned out subsequently to be short-lived, was accompanied by an increase in Hong Kong
dollar deposits, the first monthly increase since
January. Although these fell again in August and
September, for the third quarter as a whole there was an
/ increase
..
(4)
Growth rates of the money supply (8):
ΜΙ
M2
M3
Foreign
Foreign
Foreign
Total
HK$ currencies Total HK$ currencies Total
HK$ currencies Total HK$ currencies
1982 Q4 -2.3 2.8
1983 Q1 4.1 3.4 17.7 Q2 4.7 -1.0 97.1 Q3 0.2 3.3 -25.6
-49.5
5.9
1.2
13.4
5.1 0.6
12.4
5.9 1.0 5.2 -0.5
12.8
4.2 -0.3
10.8
12.3
3.9 -2.5
12.3
10.0 4.4
16.3
9.9 2.3
18.6
As at end of
Sept
1983
($mn) 30,008 27,591 2,417 253,384 126,938 126,446 299,450 148,528 150,922
18