XN000022-1979-01-03 — Page 2

WEDNESDAY, JANUARY 3, 1979.

MONEY SUPPLY FIGURES FOR NOVEMBER

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GOVERNMENT TODAY (WEDNESDAY) RELEASED THE BANKING AND MONEY SUPPLY FIGURES FOR NOVEMBER.

THEY SHOW THAT THE MONEY SUPPLY ON THE WIDER DEFINITION (M2) ROSE IN NOVEMBER, AFTER FALLING SLIGHTLY IN OCTOBER, BUT THE LONGER-TERM RATE OF GROWTH FELL BACK DURING THE MONTH.

TWO NEW BANKS BEGAN TO FUNCTION IN NOVEMBER, BUT ARE NOT

LIKELY TO HAVE ANY GREAT EFFECT ON THE FIGURES.

M1 (NOTES AND COINS IN CIRCULATION AND DEMAND DEPOSITS AT LICENSED BANKS) FELL BY $523 MILLION (2.4 PER CENT) IN NOVEMBER, TO $20,958 MILLION, WHICH WAS 20.7 PER CENT ABOVE THE NOVEMBER, 1977, FIGURE.

M2 (M1, PLUS TIME DEPOSITS AND SAVINGS DEPOSITS) ROSE BY $812 MILLION IN NOVEMBER (1.1 PER CENT) TO $71,490 MILLION, 26.8 PER CENT ABOVE THE FIGURE FOR THE END OF NOVEMBER, 1977.

THE ANNUAL GROWTH RATE FOR BOTH M1 AND M2 HAS NOW FALLEN TWO MONTHS IN A ROW.

M1 AT THE END OF OCTOBER WAS 25.0 PER CENT ABOVE THE OCTOBER, 1977. FIGURE, AND AT THE END OF SEPTEMBER THE FIGURE WAS 30.2 PER CENT UP ON THE SEPTEMBER, 1977, FIGURE- M2 AT THE END OF OCTOBER WAS 27.6 PER CENT UP ON THE YEAR, AND AT THE END OF SEPTEMBER WAS 30.3 PER CENT UP.

COMPARING THE AVERAGE FOR THE PERIOD SEPTEMBER-NOVEMBER, 1978, WITH THE SAME PERIOD OF 1977, TO SMOOTH OUT ANY UNUSUAL MONTHLY FLUCTUATIONS, M1 SHOWS AN INCREASE OF 25.2 PER CENT AND M2 AN INCREASE OF 28.2 PER CENT.

THIS COMPARISON ALSO SHOWS SOME SLOWING DOWN IN THE RATE OF INCREASE SINCE OCTOBER.

THERE WAS A VERY PRONOUNCED MOVEMENT IN NOVEMBER FROM DEMAND DEPOSITS, WHICH EARN NO INTEREST, TO TIME DEPOSITS: THIS PRESUMABLY REFLECTS THE INCREASES IN INTEREST RATES ON TIME DEPOSITS ON OCTOBER 30 AND NOVEMBER 9.

THERE WAS AN INCREASE IN LOANS AND ADVANCES IN HONG KONG, WITH THE TOTAL OUTSTANDING RISING DURING NOVEMBER BY $2,353 MILLION TO $50,886 MILLION, WHICH WAS 43.1 PER CENT ABOVE THE LEVEL AT THE END OF NOVEMBER, 1977.

THE RATE OF GROWTH OF LOANS AND ADVANCES, ON AN ANNUAL COMPARISON, HAS BEEN ACCELERATING IN THE SECOND HALF OF 1978, WITH OCTOBER 41.5 PER CENT ABOVE OCTOBER, 1977, AND SEPTEMBER 37.7 PER CENT ABOVE SEPTEMBER, 1977.

THE TREND IS ALSO APPARENT FROM A THREE MONTHLY COMPARISON, WITH SEPTEMBER-NOVEMBER, 1978, 40.8 PER CENT UP ON THE SAME PERIOD OF 1977.

THERE WAS