XN000022-1996-07-31 — Page 5

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Monetary statistics for June

According to statistics published today (Wednesday) by the Hong Kong Monetary Authority, total deposits and total loans and advances both rose during June 1996. Table 1 summarises figures for June 1996 and comparisons with earlier months. Table 2 provides an analysis of loans and advances for use in Hong Kong by major economic sector in the June quarter.

Deposits

Total deposits rose by 1.3% in June, reversing the decline of 1.3% in the previous month. The increase was attributable to a 2.5% growth in HK$ deposits, which more than offset the slight fall of 0.2% in foreign currency deposits.

The rise in HK dollar deposits was across-the-board. Partly fuelled by new share subscription activities, demand and time deposits grew rapidly by 3.5% and 2.3% respectively in June, in sharp contrast to their respective declines of 3.1% and 0.4% in May. Savings deposits also grew faster by 2.7% in June, following an increase of 0.9% in the previous month. The decline in foreign currency deposits was due entirely to a 0.3% fall in US dollar deposits, while non-US$ foreign currency deposits increased slightly during the month.

Notwithstanding the pick-up in June, total deposits on the whole rose more slowly in the June quarter. However, as the slow-down in non-US dollar foreign currency deposits reflects to a large extent exchange rate valuation effects, the underlying trend was a more moderate slow-down. The growth in HK dollar deposits during the year to June remained broadly in line with that in nominal GDP and domestic credit expansion.

Loans and Advances

Total loans and advances rose by 0.5% in June, following a 0.4% decline in May. The rise reflects primarily a further expansion in domestic credit, which grew by 1.2% in June after an increase of 2.0% in the previous month. Offshore lending was static, as the value of yen loans continued to be eroded by a further depreciation of the Japanese yen.

Analysed by currency, HK$ loans increased by 1.2% during the month while foreign currency loans rose by 0.2%. As HK dollar deposits grew faster than HK dollar loans, HK$ loan-to-deposit ratio fell from 109.6% at end-May to 108.2% at end- June.