According to statistics published today (Monday) by the Hong Kong Monetary Authority, excluding the deposits created by the initial public offering (IPO)-related loans, total deposits and Hong Kong dollar deposits with authorized institutions increased by 0.3% and 0.1% respectively in April 2021. In the year to end-April, total deposits and Hong Kong dollar deposits grew by 1.2% and 2.2% respectively.
Large-scale IPO activities at the end of March caused an increase in deposits that resulted in a high base effect. As these IPO activities ended and issuers returned application monies, total deposits remained virtually unchanged in April. Among the total, Hong Kong dollar deposits declined by 0.5%, while overall foreign currency deposits increased by 0.6%. Renminbi deposits in Hong Kong increased by 1.2% to RMB782.0 billion at the end of April. The total remittance of renminbi for cross-border trade settlement amounted to RMB561.8 billion in April, compared with RMB676.4 billion in March. It should be noted that changes in deposits are affected by a wide range of factors, such as interest rate movements and fund-raising activities. It is therefore more appropriate to observe the longer-term trends, and not to over-generalise fluctuations in a single month.
Excluding the IPO-related loans, total loans and advances edged up by 0.2% in April, and increased by 2.6% in the year to end-April. As IPO activities ended and customers repaid subscription loans, total loans and advances edged down by 0.2% in April. Among the total, loans for use in Hong Kong (including trade finance) and loans for use outside Hong Kong decreased by 0.2% and 0.1% respectively. The Hong Kong dollar loan-to-deposit ratio edged down to 83.2% at the end of April from 83.3% at the end of March, as Hong Kong dollar deposits decreased at a slower pace than Hong Kong dollar loans.
Hong Kong dollar M2 and M3 both went down by 0.6% in April, but grew by 8.1% and 8.0% respectively compared to a year ago. The seasonally-adjusted Hong Kong dollar M1 edged up by 0.2% in April, and rose by 27.4% compared to a year ago, reflecting in part investment-related activities. Total M2 and M3 both edged up by 0.1% in April, and rose by 5.6% and 5.5% respectively from a year earlier. Excluding the deposits created by the IPO-related loans, Hong Kong dollar M2 and M3 both edged down by 0.1%, but both went up by 2.0% in the year to end-April; total M2 and M3 both increased by 0.3%, and both increased by 1.0% in the year to end-April.
As monthly monetary statistics are subject to volatilities due to a wide range of transient factors, such as seasonal and IPO-related funding demand as well as business and investment-related activities, caution is required when interpreting the statistics.
Hong Kong Monetary Authority
31 May 2021
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