According to statistics published by the Hong Kong Monetary Authority (HKMA), total deposits with authorized institutions saw a 0.6% increase in July 2024. This growth includes both Hong Kong dollar and foreign currency deposits, which rose by 0.2% and 0.9% respectively.

Deposit Trends and Renminbi Activity

Over the year leading up to the end of July, total deposits grew by 3.8%, while Hong Kong dollar deposits increased by 1.3%. However, Renminbi deposits in Hong Kong experienced a slight decline of 0.4%, settling at RMB1,057.5 billion by the end of the month. The total remittance of Renminbi for cross-border trade settlement was RMB1,281.5 billion in July, up from RMB1,260.8 billion in June.

The HKMA emphasized that deposit changes are influenced by various factors, including interest rate movements and fundraising activities. Therefore, longer-term trends should be prioritized over short-term monthly fluctuations.

Loans and Advances

Total loans and advances decreased by 1.0% in July and by 2.9% for the year up to the end of July. Loans for use in Hong Kong, including trade finance, fell by 1.4%, while loans for use outside of Hong Kong increased by 0.3%. Consequently, the Hong Kong dollar loan-to-deposit ratio dropped to 80.0% at the end of July from 81.3% at the end of June.

Monetary Aggregates

Hong Kong dollar M2 and M3 both rose by 0.3% in July and by 2.0% compared to the same period last year. The seasonally-adjusted Hong Kong dollar M1 increased by 2.8% in July, although it decreased by 3.0% year-on-year, partly due to investment-related activities. Total M2 and M3 both experienced a 0.7% increase in July and a 7.1% increase compared to a year earlier.

The HKMA cautioned that monthly monetary statistics are subject to volatilities arising from various transient factors such as seasonal demands, IPO-related funding requirements, and business and investment activities. Therefore, careful interpretation of the data is advised.

For more detailed information, the full report can be accessed on the Hong Kong Monetary Authority website.

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