Hong Kong: Monetary Statistics For August 20112 October, 2011, 22:29. Posted by Zarathustra
Tags: Economy, Hong Kong, Hong Kong Monetary Authority, Money Supply
Hong Kong Monetary Authority published the latest set of monetary statistics for August on Friday.
Hong Kong dollar M1 money supply decreased by 1.9% on a non-seasonally adjusted basis compared with July, when money supply rose slightly. On a seasonally adjusted basis, Hong Kong dollar M1 money supply fell by 2.3%. Hong Kong dollar M2 money supply decreased by 1.8% after rising 2.1% in July. Hong Kong dollar M3 decreased by 1.7% as well.
On an year-on-year basis, Hong Kong dollar M1 money supply increased by 10.13%, (vs. 15.47% increase in July), M2 increased by 7.03% (vs. 9.41% increase in July), and M3 increased by 6.89% (vs. 9.23% increased in July).
Total deposits decreased by 0.5% in August. Hong Kong dollar deposits decreased by 2.0% in August, while foreign-currency deposits increased by 1.0%, driven by a 6.4% growth of Chinese Yuan deposits. Loan-to-deposit ratio rose to 85.9% at the end of August.
Source: Hong Kong Monetary Authority, Centaline
The trend remains that money supply growth has been slowing. Looking at the actualy money supply figure instead of the growth figure, money supply remains well below its October 2010 peak.
With the Federal Reserve implementing operation twist instead of a full-blown quantitative easing programme, and as the debt crisis in China (yes, I now call it debt crisis) continues to escalating, and together with the on-going and boring European debt/currency/banking crisis, that should be no catalyst in sight for any surge in money supply in the near term. Meanwhile, the strength of the US dollar, if continues (as I have been expecting for), will give a tightening bias towards Hong Kong’s monetary condition. I expect the growth number to continue to moderate, and possibly turn into a negative number.