XN000022-1979-06-01 — Page 2

FRIDAY, JUNE 1, 1979

APRIL MONEY SUPPLY STATISTICS ******

THE APRIL 1979 MONEY SUPPLY STATISTICS ARE PUBLISHED TODAY (FRIDAY) WITH THE MONTHLY FIGURES FOR BANKS AND FOR DEPOSIT-TAKING COMPANIES.

THE GROWTH RATE OF THE MONEY SUPPLY IS STILL SLOWING DOWN, BUT BANK LENDING CONTINUES TO EXPAND TOO FAST, ALTHOUGH LENDING TO THE PUBLIC BY BANKS AND DEPOSIT-TAKING COMPANIES TOGETHER IS GROWING RATHER LESS FAST.

MONEY SUPPLY

THE MONEY SUPPLY ON BOTH DEFINITIONS ROSE IN APRIL. M1 (NOTES AND COIN IN CIRCULATION AND DEMAND DEPOSITS AT LICENSED BANKS) ROSE

BY $1,048 MILLION (4.7 PER CENT) TO $23.355 MILLION, WHICH IS 25.7 PER CENT ABOVE THE LEVEL AT THE END OF APRIL 1978.

M1 HAS BEEN MOVING VERY ERRATICALLY IN RECENT MONTHS: DESPITE ITS SUBSTANTIAL GROWTH IN APRIL IT IS STILL BELOW THE LEVEL OF END-JANUARY (WHICH WAS INFLATED BY THE LUNAR NEW YEAR EXPANSION OF THE NOTE CIRCULATION).

SINCE END-DECEMBER 1978 M1 HAS RISEN AT AN ANNUAL RATE OF A LITTLE OVER 15 PER CENT.

M2 (M1 PLUS TIME AND SAVINGS DEPOSITS) ROSE IN APRIL BY $1,582 MILLION (2.5 PER CENT) TO $78,376 MILLION, WHICH WAS 23.9 PER CENT ABOVE THE LEVEL OF END-APRIL 1978. SINCE THE END OF DECEMBER 1978, M2 HAS RISEN AT AN ANNUAL RATE OF ABOUT 22 PER CENT,

A COMPARISON OF THE AVERAGE LEVEL OF M2 IN THE THREE MONTHS FEBRUARY TO APRIL 1979 WITH THE SAME PERIOD OF 1978 SHOWS AN INCREASE OF 24.2 PER CENT THIS COMPARISON HAS FALLEN EVERY MONTH SINCE ITS PEAK OF 28.7 PER CENT IN AUGUST TO OCTOBER 1978.

THIS CONFIRMS THAT, DESPITE THE ERRATIC PATH OF M1, THE GROWTH RATE OF THE MONEY SUPPLY ON THE WIDER DEFINITION IS CONTINUING TO FALL TOWARDS A LEVEL MORE COMPATIBLE WITH THE FORECAST GROWTH RATE OF THE ECONOMY IN 1979.

BANKING STATISTICS

BANK LOANS AND ADVANCES IN HONG KONG (INCLUDING LOANS TO DEPOSIT-TAKING COMPANIES) ROSE IN APRIL 1979 BY $2,161 MILLION (3.7 PER CENT) TO $60,116 MILLION, WHICH WAS 46.2 PER CENT ABOVE THE LEVEL OF APRIL 1978.

/ALTHOUGH