FRIDAY, JULY 10, 1981
MONEY SUPPLY AND FINANCIAL STATISTICS: MAY 1981
THE MONEY SUPPLY AND FINANCIAL STATISTICS FOR MAY 1981 ARE PUBLISHED TODAY. THEY SHOW APPRECIABLE INCREASES DURING THE MONTH IN THE MONEY SUPPLY AND IN TOTAL CREDIT TO THE ECONOMY, BUT THESE RISES PROBABLY REFLECT SPECIAL FACTORS MORE THAN ANY UNDERLYING EXPANSION.
THERE WAS AN INCREASE IN THE DEMAND FOR CREDIT DURING THE LAST WEEK OF MAY TO COVER HEAVY APPLICATIONS FOR A NEW ISSUE OF SHARES OFFERED FOR SALE BY INTERNATIONAL CITY HOLDINGS LTD, SO ADVANCES BY BANKS AND DEPOSIT-TAKING COMPANIES ROSE. FURTHERMORE DEPOSITS WITH DEPOSIT-TAKING COMPANIES ROSE OVER THE END OF MAY, REFLECTING THE HOLDING BY THE ISSUING HOUSE CONCERNED OF THE FUNDS RECEIVED IN THE SUBSTANTIAL OVERSUBSCRIPTION TO THIS ISSUE- AND DEMAND DEPOSITS WITH BANKS WERE ALSO UP ON THE MONTH, PERHAPS BECAUSE SOME CHEQUES DRAWN TO COVER APPLICATIONS FOR SHARES HAD NOT YET BEEN PRESENTED.
THERE WAS A CONTINUED INFLOW OF FUNDS INTO THE HONG KONG MONETARY SECTOR DURING THE MONTH, CONTRIBUTING TO THE INCREASE IN THE MONEY SUPPLY.
THE DETAILED FIGURES FOR MAY 1981, AND COMPARISONS WITH PREVIOUS MONTHS, ARE SET OUT IN THE ATTACHED TABLE.
AS THE FINANCIAL SECRETARY POINTED OUT IN PARAGRAPH 32 OF HIS BUDGET SPEECH, OUR MONETARY STATISTICS DO NOT YET PROVIDE A BASIS FOR REALLY MEANINGFUL ECONOMIC ANALYSIS. THE GOVERNMENT HOPES SHORTLY TO BE IN A POSITION TO PUBLISH ON A REGULAR BASIS THE STATISTICS WHICH ARE NOW BEING COLLECTED UNDER THE MONETARY STATISTICS ORDINANCE.
MONEY SUPPLY
THE MONEY SUPPLY ON THE NARROWEST DEFINITION, M1 (NOTES AND COINS WITH THE PUBLIC, PLUS DEMAND DEPOSITS, OTHER THAN FROM BANKS AND DEPOSIT-TAKING COMPANIES, WITH LICENSED BANKS) ROSE BY 7.8% IN MAY, AFTER FALLING BY 3.0% IN APRIL, WITH THE RISE REFLECTING AN INCREASE OF 12.1% IN DEMAND DEPOSITS WITH BANKS.
M2 (M1 PLUS SAVINGS AND TIME DEPOSITS, OTHER THAN FROM BANKS AND DTCS, WITH LICENSED BANKS) INCREASED BY 0.9% IN MAY, AFTER A 0.3% RISE IN APRIL.
M3 (M2 PLUS PUBLIC DEPOSITS WITH DEPOSIT-TAKING COMPANIES) INCREASED BY 5.6% IN MAY, UP FROM AN INCREASE OF 0.6% IN APRIL.
IN THE LAST THREE MONTHS M1 ROSE BY 5.1%, AFTER FALLING BY 3.2% IN THE PREVIOUS THREE MONTHS. IN THE LAST THREE MONTHS M2 ROSE BY 2.4% AND M3 BY 7.7%, DOWN FROM THE IR RESPECTIVE INCREASES OF 6.5% AND 10.2% IN THE PREVIOUS THREE MONTHS.
/LOANS