Hong Kong: Monetary Statistics For May 201130 June, 2011, 23:57. Posted by Zarathustra
Tags: Economy, Hong Kong, Hong Kong Moentary Authority, Money Supply
Hong Kong Monetary Authority published the monetary statistics for May 2011 earlier today.
Hong Kong dollar M1 money supply increased by 4.2% in May compared to the previous month, the second month of increase. On an year-on-year basis, M1 money supply in May 2011 was 12.5% higher than May 2010. Note that we had the European debt crisis emerged for the first time last year summer, so we saw some noticeable drop last year around this time, which would most certainly make the year-on-year figure today looks larger. In terms of M1, the money supply as of the end of May was 9.4% lower than the peak in October 2010.
In terms of M2 money supply, it fell slightly by 0.14% (not seasonally adjusted), or 11.5% higher than the same month last year. Of course, we also did see a lower M2 last year summer around the time when the European debt crisis emerged last year, so the year-on-year figure may look pretty today.
Source: Hong Kong Monetary Authority
In terms of deposits, Hong Kong dollar deposits contracted by 0.4% while foreign-currency deposits rose by 1.7%. In particular, Chinese Yuan (or Renminbi) deposits rose by 7.5%. Total loans for use in Hong Kong grew by 2.6% m-o-m, and 3.9% m-o-m for use outside Hong Kong. Hong Kong dollar loans increased by 2.2% m-o-m, while foreign currencies loans increased by 4.0% m-o-m.
On the whole, the monetary condition remains stable so far. Although not much tighter from the peak, it is probably not getting any looser either. Without major crisis, I expect money growth to continue to moderate to close to no growth. With uncertainties rising, we should probably be aware of sudden changes in capital flow, which will undermine the monetary system as well as the economy as a whole.