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On the other hand, loans for trade financing (including offshore trade) and other loans for use in Hong Kong rose further by 1.2% and 2.1% respectively during the month.

Analysed by currency, HK dollar loans increased by 2.6% during the month while foreign currency loans fell by 2%. As HK dollar loans rose but HK dollar deposits declined, the HK dollar loan-to-deposit ratio rose to 109.6% at end-May, from 106.6% at end-April.

Money supply

HK$M1 dropped by 1.4% in May, as the decline in HK. dollar demand deposits more than offset an increase in currency held by the public of 0.9%. HK$M2 and HK$M3 both fell slightly by 0.1% during the month, after rising by 0.3% and 0.4% respectively in April.