Hong Kong dollar equivalents, part of the increase in foreign currency deposits, and so in the foreign currency components
of the various definitions of
of the money supply, reflects the
valuation effect of a weaker Hong Kong dollar. The exchange
rate of the Hong Kong dollar against the US dollar, in which
most foreign currency deposits are denominated, at the end of
June 1983 represents a depreciation of 9.5% since the end of
December 1982. Notwithstanding the difficulties in
interpreting the money supply figures because of these factors, it seems that the growth rate of the money supply,
however defined, was slowing down substantially during the
first half of 1983. This should have favourable effect on
the domestically-generated component of the rate of inflation.
Negotiable certificates of deposit
3.7
Local negotiable certificates of deposit (NCDs)
issued by deposit-taking institutions in Hong Kong and held
outside the monetary sector count as part of the money
supply. During the first half of 1983, these increased by
6.5%, compared with 36.3% during the second half of 1982(8)
This firstly reflected the slower growth rate of NCDs issued by deposit-taking institutions. During the first
/half,
(8) Negotiable certificates of deposit issued by banks and deposit-taking
companies in Hong Kong ($mn):
Issued and outstanding
Held by banks & dtcs
Held outside the monetary sector
As at end
of
Total
of which in HK$
of which
of which
Total
in HK$
Total
in HK$
1982 Hl
8,909
4,670
4,482
2,392
4,427
2,279
H2
11,483 5,318
5,450
2,889
6,033
2,429
1983 HL
13,365 6,020
6,937
3,610
6,428
2,410
26
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