XN000022-1979-12-04 — Page 2

TUESDAY, DECEMBER 4, 1979

MONEY AND BANKING STATISTICS FOR OCTOBER

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THE MONEY SUPPLY AND FINANCIAL STATISTICS FOR OCTOBER 1979 WERE PUBLISHED TODAY (TUESDAY).

THEY SHOW A MARKED FALL IN THE GROWTH RATE OF CREDIT TO THE ECONOMY, BUT A RISE IN THE GROWTH RATE OF THE MONEY SUPPLY.

MONEY SUPPLY

M1 ROSE BY 1.2 PER CENT IN OCTOBER. AGAINST 3.5 PER CENT IN SEPTEMBER. M2 ROSE IN OCTOBER BY 2.4 PER CENT, AND M3 BY 3 PER CENT, BOTH SLIGHTLY HIGHER THAN IN SEPTEMBER.

IN THE LATEST THREE MONTHS M2 HAS RISEN BY 6.5 PER CENT, AND M3 BY 7.7 PER CENT.

SINCE DECEMBER 1978 M2 HAS RISEN AT AN ANNUAL RATE OF 23.7 PER CENT AND M3 AT AN ANNUAL RATE OF 25.7 PER CENT: THESE INCREASES ARE SOME WAY BELOW THE FORECAST GROWTH RATE IN 1979 OF GDP AT CURRENT PRICES OF ABOUT 27 PER CENT.

M1 IS DEFINED AS NOTES AND COINS IN CIRCULATION, AND DEMAND DEPOSITS AT LICENSED BANKS. M2 CONSISTS OF M1 PLUS TIME AND SAVINGS DEPOSITS WITH BANKS. M3 CONSISTS OF M2 PLUS DEPOSITS WITH DEPOSIT-TAKING COMPANIES, LESS DEPOSITS HELD

BY THOSE COMPANIES WITH BANKS IN HONG KONG, AND LESS THEIR HOLDINGS OF NOTES AND COINS.

CREDIT TO THE ECONOMY

LENDING IN HONG KONG BY BANKS AND DEPOSIT-TAKING COMPANIES TOGETHER ROSE BY 2.2 PER CENT IN OCTOBER, DOWN FROM 2.8 PER CENT IN SEPTEMBER. IN THE LAST THREE MONTHS THIS MEASURE, WHICH IS THE MOST COMPREHENSIVE FIGURE AVAILABLE FOR CREDIT TO THE ECONOMY, HAS RISEN AT AN ANNUAL RATE OF 26.2 PER CENT, WHILE SINCE DECEMBER 1978 IT HAS RISEN AT AN ANNUAL RATE OF 28.6 PER CENT: THESE ARE BOTH BROADLY CONSISTENT WITH THE FORECAST GROWTH RATE OF THE ECONOMY THIS YEAR.

LENDING IN HONG KONG BY BANKS ALONE ROSE IN OCTOBER BY 2.3 PER CENT, WELL DOWN FROM SEPTEMBER'S INCREASE OF 3.8 PER CENT- IN THE LAST THREE MONTHS IT ROSE BY 6.9 PER CENT. LENDING IN HONG KONG BY DEPOSIT-TAKING COMPANIES ALONE ROSE IN OCTOBER BY 2.6 PER CENT, ALSO WELL DOWN FROM SEPTEMBER'S INCREASE OF 3.9 PER CENT, AND IN THE LAST THREE MONTHS IT ROSE BY 9.5 PER CENT.

/LOANS ABROAD