XN000022-1994-12-30 — Page 2

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Monetary statistics for November 1994

There has been a notable movement from Hong Kong dollar demand and savings deposits into time deposits, caused partly by higher interest rates in late November, according to statistics published today (Friday) by the Hong Kong Monetary Authority.

Deposits

The growth of Hong Kong dollar deposits accelerated to 2% in November compared with 0.3% in October.

There was a notable shift of Hong Kong dollar demand and savings deposits into time deposits. The former two recorded respective falls of 2.5% and 1.7% in November against a 4.4% surge in the latter.

The shift was, at least in part, prompted by the rise in domestic interest rates which followed the 75 basis point rise in US interest rates in mid- November.

Foreign currency deposits grew by 3% in November. In particular, US dollar deposits, after falling in September and in October, rebounded strongly by 5.1%, the second largest monthly increase during the year. Other foreign currency deposits also increased but at more moderate pace of 0.6%.

Loans and Advances

Total outstanding loans and advances extended by authorised institutions contracted by 0.2%. The contraction was entirely due to the reduction in non- US dollar foreign currency loans, probably reflecting the slow down in Euro- yen loans by the Japanese banks in Hong Kong.

On the other hand, the growth of Hong Kong dollar loans picked up from 0.4% in October to 1.7% in November. The restraining effect of the latest rises in interest rates on credit demand has yet to be seen.