Caroline Bishop
Feb 28, 2025 02:10
The Hong Kong Monetary Authority reports an increase in total deposits and renminbi deposits in January 2025, indicating positive economic trends.
In January 2025, the Hong Kong Monetary Authority (HKMA) revealed a significant rise in total deposits with authorized institutions, indicating positive economic trends. Total deposits increased by 1.4%, with both Hong Kong dollar deposits and foreign currency deposits experiencing growth of 1.3% and 1.5% respectively, according to the HKMA. Notably, renminbi deposits saw a substantial surge, climbing by 6.5% to reach RMB986.8 billion by the end of January, primarily driven by corporate fund flows.
Deposit and Loan Dynamics
The total remittance of renminbi for cross-border trade settlement in January was RMB1,377.4 billion, slightly lower than December’s figure of RMB1,401.6 billion. The HKMA advises that deposit changes can be influenced by factors such as interest rate movements and fundraising activities, and suggests that longer-term trends provide more accurate insights than monthly fluctuations.
On the other hand, total loans and advances experienced a slight decrease of 0.2% in January. Loans for use in Hong Kong, including trade finance, dropped by 0.5%, while loans for use outside Hong Kong saw a 0.6% increase. The loan-to-deposit ratio in Hong Kong dollars also decreased from 77.1% at the end of December to 75.7%, attributed to an increase in Hong Kong dollar deposits and a decrease in loans.
Monetary Aggregates
In January, both the Hong Kong dollar M2 and M3 monetary aggregates rose by 1.5%, representing a 4.5% increase compared to the previous year. Meanwhile, the seasonally adjusted Hong Kong dollar M1 experienced a decrease of 3.0% in January, but showed a 1.8% year-on-year increase, partly reflecting investment-related activities. Total M2 and M3 also saw a 1.6% increase in January and a strong 9.6% growth compared to the same period last year.
The HKMA advises caution when interpreting monthly monetary statistics, as they can be volatile due to transient factors such as seasonal and IPO-related funding demands, as well as business and investment activities.
For comprehensive details, refer to the official release by the Hong Kong Monetary Authority.
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