According to the Hong Kong Monetary Authority (HKMA), total deposits with authorized institutions in Hong Kong saw an increase of 1.1% in May 2024. The data, released on June 28, highlights that Hong Kong dollar deposits grew by 0.3% while foreign currency deposits rose by 1.8%.
Deposit Growth and Renminbi Trends
As of the end of May, total deposits had grown by 3.2% year-to-date, with Hong Kong dollar deposits increasing by 0.9%. Notably, renminbi deposits in Hong Kong surged by 4.2%, reaching RMB1,134.0 billion. This rise is largely attributed to corporate fund flows. However, the total remittance of renminbi for cross-border trade settlement decreased to RMB1,183.2 billion in May from RMB1,257.0 billion in April.
The HKMA emphasized that deposit changes are influenced by multiple factors, including interest rate movements and fundraising activities. Thus, longer-term trends should be observed rather than drawing conclusions from monthly fluctuations.
Loans and Advances
In contrast to the growth in deposits, total loans and advances fell by 0.4% in May and by 2.4% over the year to end-May. Loans for use in Hong Kong, including trade finance, decreased by 0.3%, while loans for use outside Hong Kong dropped by 0.7%. Consequently, the Hong Kong dollar loan-to-deposit ratio declined to 81.4% at the end of May from 82.1% at the end of April.
Monetary Aggregates
Hong Kong dollar M2 and M3 both saw a 0.4% increase in May, with a 1.5% rise compared to the same period last year. The seasonally adjusted Hong Kong dollar M1, however, decreased by 0.1% in May and by 8.4% year-on-year, partly due to investment-related activities. Total M2 and M3 increased by 1.2% in May and by 7.8% year-on-year.
The HKMA cautioned that monthly monetary statistics could be volatile due to various transient factors, such as seasonal demands, IPO-related funding, and business or investment activities. Therefore, careful interpretation is required when analyzing these statistics.
For more detailed information, the full report is available on the Hong Kong Monetary Authority website.
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