XN000022-1984-08-31 — Page 5

DEPOSITS

FRIDAY, AUGUST 31, 1984

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HONG KONG DOLLAR DEPOSITS FELL BY ONE PER CENT IN JULY, AGAINST A RISE OF 1.7 PER CENT IN JUNE. IN THE THREE MONTHS TO JULY, HONG KONG DOLLAR DEPOSITS DECREASED MARGINALLY, BY 0.4 PER

FOREIGN CENT, BUT INCREASED BY 23.8 PER CENT OVER THE 12 MONTHS. CURRENCY DEPOSITS CONTINUED TO RISE, BY ONE PER CENT. MONTHS TO JULY, THE INCREASE WAS NINE PER CENT AND OVER THE 12 MONTHS THE INCREASE WAS 31.0 PER CENT.

IN THE THREE

DURING THE THREE MONTHS TO JULY, WHILE TOTAL DEPOSITS WITH BANKS FELL SLIGHTLY BY 0.2 PER CENT, THOSE WITH DEPOSIT-TAKING COMPANIES ROSE BY 23.0 PER CENT. THIS SHIFT LARGELY REFLECTED A MOVEMENT OF HONG KONG DOLLAR DEPOSITS FROM BANKS TO DEPOSIT-TAKING COMPANIES BECAUSE THE INTEREST RATES OFFERED BY THE LATTER, WHICH CLOSELY REFLECT MONEY MARKET RATES, WERE WELL ABOVE THE DEPOSIT RATES SET BY THE HONG KONG ASSOCIATION OF BANKS DURING THIS PERIOD,

THIS DISPARITY OF INTEREST RATES ALSO MADE SWAP DEPOSITS ATTRACTIVE, AND THERE IS EVIDENCE THAT THIS MAY EXPLAIN THE SHIFT FROM HONG KONG DOLLAR TO FOREIGN CURRENCY DEPOSITS.

HONG KONG DOLLAR MONEY SUPPLY

HONG KONG DOLLAR MONEY SUPPLY ON ALL DEFINITIONS DECREASED, WITH HK$M1 (THE NARROWEST DEFINITION) FALLING BY 5.7 PER CENT, HK$M2 BY 3.6 PER CENT AND HK$M3 BY 1.3 PER CENT. THESE WERE IN CONTRAST TO THEIR RESPECTIVE INCREASES OF 0.7 PER CENT, 1.1 PER CENT AND 1.6 PER CENT IN JUNE.

HOWEVER,

IN THE THREE MONTHS TO JULY, HK$M1, HK$M2 AND HK$M3 FELL BY 10.3 PER CENT, 6.0 PER CENT AND 0.9 PER CENT RESPECTIVELY. OVER THE 12 MONTHS, THEY RECORDED INCREASES OF 6,2 PER CENT, 14.2 PER CENT AND 21.5 PER CENT RESPECTIVELY.

TOTAL MONEY SUPPLY

WHILE TOTAL M1 DROPPED BY 4.6 PER CENT. TOTAL M2 FELL BY TWO PER CENT AND TOTAL M3 BY 0.1 PER CENT. FOLLOWING INCREASES OF ONE PER CENT, 1.2 PER CENT AND 2.1 PER CENT RESPECTIVELY IN JUNE. IN THE THREE MONTHS TO JULY, TOTAL M1 FELL BY 8.6 PER CENT AND TOTAL M2 BY 0.4 PER CENT BUT TOTAL M3 GREW BY 3.7 PER CENT. OVER THE 12 MONTHS. THE CORRESPONDING GROWTH RATES WERE 8.7 PER CENT, 17.6 PER CENT AND 26.0 PER CENT.

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