XN000022-1981-01-09 — Page 3

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BANKS AND DEPOSIT-TAKING COMPANIES

TOTAL LOANS AND

ADVANCES IN HK

FRIDAY, JANUARY 9, 1981

119 554

112 427 101 548 (+6.3%) (+17.7%)

71 738 (+66.7%)

* THESE FIGURES ARE RECALCULATED TO EXCLUDE BANKS' LIABILITIES TO, AND CLAIMS ON, DEPOSIT-TAKING COMPANIES.

THE STATUTORY REQUIREMENT FOR DEPOSIT-TAKING COMPANIES TO OBSERVE A MINIMUM LIQUID ASSETS RATIO CAME INTO FORCE ON JANUARY 1, 1980.

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) FELL BY 4.6 PER CENT IN NOVEMBER, AFTER HAVING REMAINED UNCHANGED IN OCTOBER.

THERE WAS A SHARP FALL IN THE VOLUME OF DEMAND (NON-INTEREST EARNING) DEPOSITS WITH LICENSED BANKS DURING THE MONTH, PRESUMABLY REFLECTING RISING INTEREST RATES AVAILABLE ON OTHER DEPOSITS.

M2 (M1 PLUS SAVINGS AND TIME DEPOSITS, OTHER THAN FROM BANKS AND DEPOSIT-TAKING COMPANIES, WITH LICENSED BANKS) FELL BY 0.6 PER CENT IN NOVEMBER, AFTER A 0.1 PER CENT RISE IN OCTOBER.

M3 (M2 PLUS DEPOSITS WITH DEPOSIT-TAKING COMPANIES) ROSE BY 2.1 PER CENT IN NOVEMBER, SLIGHTLY DOWN FROM AN INCREASE OF 2.2 PER CENT IN OCTOBER. THE NOVEMBER GROWTH WAS CAUSED BY A 9.5 PER CENT RISE IN DEPOSITS WITH DEPOSIT-TAKING COMPANIES, AGAIN PRESUMABLY REFLECTING INTEREST RATE MOVEMENTS DURING THE MONTH.

IN THE LAST THREE MONTHS M1 ROSE BY ONLY 1.3 PER CENT AND M2 BY 2.2 PER CENT, MUCH LESS THAN THE 14.9 PER CENT INCREASE (ON BOTH DEFINITIONS) IN THE PREVIOUS THREE MONTHS. IN THE LAST THREE MONTHS M3 GREW BY 8.0 PER CENT, ALSO WELL DOWN FROM AN 11.0 PER CENT INCREASE IN THE PREVIOUS THREE MONTHS.

LOANS IN HONG KONG

TOTAL LOANS AND ADVANCES IN HONG KONG EXPANDED BY 6.3 PER CENT IN NOVEMBER, UP FROM A 5.6 PER CENT RISE IN OCTOBER. IN THE LAST THREE MONTHS TOTAL LOANS AND ADVANCES IN HONG KONG ROSE BY 17.7 PER CENT, SHARPLY UP FROM AN INCREASE OF 10.9 PER CENT IN THE PREVIOUS THREE MONTHS.

BANK LOANS IN HONG KONG INCREASED BY 6.6 PER CENT IN NOVEMBER, AFTER A RISE OF 6.0 PER CENT IN OCTOBER. LOANS IN HONG KONG BY DEPOSIT-TAKING COMPANIES ROSE BY 5.7 PER CENT IN NOVEMBER, AFTER RISING BY 4.3 PER CENT IN OCTOBER. IN THE LAST THREE MONTHS, BANK LOANS IN HONG KONG GREW BY 18.4 PER CENT AND LOANS IN HONG KONG BY DEPOSIT-TAKING COMPANIES BY 15.8 PER CENT, WELL UP FROM THE INCREASE OF 9.8 PER CENT AND 14.3 PER CENT RESPECTIVELY IN THE PREVIOUS THREE MONTHS.

/FOREIGN ASSETS