XN000022-1997-04-30 — Page 6

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Offshore loans dropped by 4.3% in March, following an increase of 0.7% in the previous month, partly due to the valuation effect arising from the weakening of the Japanese yen during the month.

Analysed by currency, both HK$ loans and foreign currency loans fell during the month, by 1.4% and 3.2% respectively.

As the decline in HK$ loans was more moderate than that of HK$ deposits, the HK$ loan-to-deposit ratio edged up to 109.1% at end-March, from 108.2% at end- February.

Quarterly Analysis of Loans for Use in Hong Kong by Major Economic Sector

Loans for use in Hong Kong grew by 8.0% in the March quarter of 1997, compared with the 4.6% rise in the December quarter of 1996.

Residential mortgage loans and other property-related lending surged further during the quarter, by 7% and 9.8% respectively, along with the buoyant property

market.

Likewise, loans to financial concerns and stock-brokers recorded notable growths of 12.5% and 15.5% respectively, while loans for wholesale and retail trade increased by 6.7%.

On the other hand, in line with the slack external trade performance, loans for trade financing dropped by 0.4% in the March quarter, while lending to the manufacturing sector continued to grow slowly by 3.7%.

Money Supply

HK$MI fell by 4.6% in March, as HK$ demand deposits dropped by 6.5% and currency held by the public fell by 1.8%.

Likewise, HK$M2 and HK$M3 contracted by 2.2% and 2.1% in March, reflecting partly the high base of comparison in February.

Compared to a year earlier, HK$M1, HK$M2 and HK$M3 rose by 13.2%, 18.5% and 18.4% respectively.