XN000022-1982-11-05 — Page 3

FRIDAY, NOVEMBER 5, 1982

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MONEY SUPPLY AND FINANCIAL STATISTICS FOR SEPTEMBER

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THE NARROWEST DEFINITION OF THE MONEY SUPPLY (M1) GREW FAIRLY RAPIDLY, WHILE THE WIDER DEFINITIONS (M2 AND M3) GREW IN SEPTEMBER AT SLOWER RATES, WHERE DIFFERENT, THAN IN AUGUST, ACCORDING TO MONEY SUPPLY AND FINANCIAL STATISTICS FOR SEPTEMBER PUBLISHED TODAY (FRIDAY).

AS THE SHIFT OF DEPOSITS FROM DEPOSIT-TAKING COMPANIES TO BANKS CONTINUED, M2 GREW FASTER THAN M3. THE FOREIGN CURRENCY COMPONENT ALSO GREW FASTER THAN THE CORRESPONDING HONG KONG DOLLAR COMPONENT ON ALL DEFINITIONS OF THE MONEY SUPPLY, BUT MUCH OF THIS DIFFERENCE WAS DUE TO VALUATION EFFECTS RESULTING FROM THE DEPRECIATION OF THE HONG KONG DOLLAR DURING SEPTEMBER THE TRADE- WEIGHTED INDEX FELL BY 1-1/2 PER CENT, WHILE AGAINST THE US DOLLAR - THE PRINCIPAL DENOMINATION OF FOREIGN CURRENCY DEPOSITS - THE DECLINE WAS 3-1/2 PER CENT. THE MONETARY STATISTICS ARE PRESENTED IN HONG KONG DOLLARS, CONTRIBUTING INSTITUTIONS HAVING CONVERTED FOREIGN CURRENCY AMOUNTS AT THE RELEVANT EXCHANGE RATE ON THE REPORTING DAY. AFTER ALLOWANCE FOR THE ESTIMATED VALUATION EFFECT. THE GROWTH RATE OF FOREIGN CURRENCY TIME AND SAVINGS DEPOSITS WAS NO FASTER THAN SIMILAR DEPOSITS IN HONG KONG DOLLARS. HOWEVER, EVEN AFTER ALLOWING FOR THE VALUATION EFFECT, FOREIGN CURRENCY TIME DEPOSITS AGAIN GREW QUITE BRISKLY, SUGGESTING THAT THE EXEMPTION OF FOREIGN CURRENCY DEPOSITS FROM INTEREST TAX, WHICH TOOK EFFECT ON FEBRUARY 25, WAS CONTINUING TO ATTRACT SUCH DEPOSITS TO HONG KONG.

(TABLE 1 ATTACHED SETS OUT THE DETAILED FIGURES FOR SEPTEMBER 1982 AND COMPARISONS WITH CORRESPONDING FIGURES FOR EARLIER MONTHS. TABLE 2 SETS OUT SOME SELECTED FIGURES FROM THE QUARTERLY ANALYSIS OF LOANS AND ADVANCES FOR USE IN HONG KONG BY SECTOR.)

HONG KONG DOLLAR MONEY SUPPLY

HK$M1 ROSE BY 5.3 PER CENT IN SEPTEMBER, COMPARED WITH 1.6 PER CENT IN AUGUST. THE GROWTH COMPRISED INCREASES OF 7.1 PER CENT IN CASH HOLDINGS BY THE PUBLIC AND 3.9 PER CENT IN HKS DEMAND DEPOSITS.

HK$M2 INCREASED BY 4.2 PER CENT IN SEPTEMBER WHILE HK$M3 WAS UP ONLY BY 1.2 PER CENT. THE DIFFERENCE REFLECTED A CONTINUATION OF THE SHIFT OF DEPOSITS FROM DEPOSIT-TAKING COMPANIES TO BANKS. BOTH RATES REPRESENT A SLOWING DOWN WHEN COMPARED WITH THE IR CORRESPONDING RATES IN AUGUST OF 6.8 PER CENT AND 3.0 PER CENT RESPECTIVELY.

IN THE THREE MONTHS TO SEPTEMBER HK$M1 ROSE BY 5.7 PER CENT, HK$M2 BY 12.8 PER CENT AND HK$M3 BY 4.3 PER CENT. IN THE TWELVE MONTHS TO SEPTEMBER, THE RESPECTIVE GROWTH RATES WERE 9.2 PER CENT, 31.2 PER CENT AND 6.3 PER CENT.

TOTAL,