XN000022-1980-04-08 — Page 2

TUESDAY, APRIL 8, 1980

MONEY SUPPLY AND FINANCIAL STATISTICS FOR FEBRUARY

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THE MONEY SUPPLY AND FINANCIAL STATISTICS FOR FEBRUARY 1980 WERE PUBLISHED TODAY (TUESDAY).

THEY SHOW A MARKED FALL IN THE GROWTH RATE OF THE MONEY SUPPLY, AND OF CREDIT TO THE ECONOMY, FROM THE VERY HIGH GROWTH RATES IN JANUARY. THE HIGHER YEAR-ON-YEAR CHANGES RECORDED IN FEBRUARY AS COMPARED WITH JANUARY ARE LARGELY A REFLECTION OF THE EARLIER INCIDENCE OF THE LUNAR NEW YEAR IN 1979 THAN IN 1980.

THE FEBRUARY FIGURES ARE STILL AFFECTED, THOUGH PROBABLY TO A LESSER EXTENT THAN IN JANUARY, BY THE SPECIAL FACTORS MENTIONED LAST MONTH, INCLUDING THE SEASONAL INFLUENCES OF THE LUNAR NEW YEAR AND TAX PAYMENTS, WHICH CONTINUED TO AFFECT DEMAND FOR CREDIT.

MONEY SUPPLY

THE MONEY SUPPLY ON THE NARROWEST DEFINITION, M1 (NOTES AND COIN WITH THE PUBLIC, PLUS DEMAND DEPOSITS, OTHER THAN FROM BANKS AND DEPOSIT-TAKING COMPANIES (DTCS), WITH LICENSED BANKS) ROSE BY TWO PER CENT IN FEBRUARY, AGAINST A 1.8 PER CENT RISE IN JANUARY. NOTES AND COIN IN THE HANDS OF THE PUBLIC ROSE BY 10.6 PER CENT OVER THE MONTH, WITH THE LUNAR NEW YEAR EXPANSION IN THE NOTE CIRCULATION TAKING, AS USUAL, SOME WEEKS TO FALL FROM ITS HOLIDAY PEAK.

MR (WHICH IS DEFINED AS M1 PLUS SAVINGS AND TIME DEPOSITS, OTHER THAN FROM BANKS AND DTCS, WITH LICENSED BANKS) ROSE BY ONLY ONE PER CENT IN FEBRUARY, AGAINST A 2.9 PER CENT RISE IN JANUARY. TOTAL DEPOSITS WITH BANKS WERE UNCHANGED IN THE MONTH, SO THAT THE RISE IN M2 REFLECTS SOLELY THE EXPANSION IN THE NOTES AND COIN IN CIRCULATION.

M3 (M2 PLUS PUBLIC DEPOSITS WITH DEPOSIT-TAKING COMPANIES) ROSE BY 2.6 PER CENT IN THE MONTH, WELL DOWN FROM THE JANUARY INCREASE OF 5.3 PER CENT. THE FEBRUARY GROWTH REFLECTS A RISE OF 7.1 PER CENT IN DEPOSITS WITH DTCS.

CREDIT TO THE ECONOMY

BANK LOANS IN HONG KONG ROSE BY 4.6 PER CENT IN FEBRUARY, WELL DOWN FROM THE JANUARY INCREASE OF 6.4 PER CENT, LOANS IN HONG KONG BY DTCS ROSE IN FEBRUARY BY 5.2 PER CENT, AGAIN WELL DOWN FROM THE JANUARY FIGURE OF 7.3 PER CENT. AS A RESULT TOTAL LOANS IN HONG KONG ROSE BY 4.7 PER CENT IN FEBRUARY, WELL DOWN ON THE 6.6 PER CENT RISE IN JANUARY.

LOANS ABROAD

THE TOTAL LOANS ABROAD ROSE IN FEBRUARY, WITH LOANS BY BANKS UP BY $780 MILLION TO $21 485 MILLION, AND LOANS BY DTCS INCREASING BY $566 MILLION TO $23 756 MILLION.

/BALANCE SHEET