Hong Kong Monetary Authority

October deposits fall 3.9pc to $1.53 trillion

PUBLISHED : Saturday, 29 November, 1997, 12:00am
UPDATED : Saturday, 29 November, 1997, 12:00am

Hong Kong dollar deposits recorded a significant 3.9 per cent drop in October to $1.53 trillion, after a 1.7 per cent increase in September, government statistics published yesterday showed.

The Government attributed the drop to a bigger comparison base for September, which was boosted by subscriptions for new shares in China Telecom (Hong Kong).

The share sale, the biggest ever in Hong Kong, was 35.2 times subscribed.

Based on the offer price at $11.68 a share and 144 million shares offered in Hong Kong, the sale froze $59.2 billion in the banking system, boosting the time deposit balance for September.

Local currency time deposits dropped 2.9 per cent in October to $1.09 trillion, after a 3.5 per cent increase in the previous month.

The Government did not say if the volatility in SAR interest rates had affected local currency deposit balance.

Following the Hong Kong Monetary Authority's move to fend off speculators in the currency, the overnight interbank lending rate was pushed to a record high of 300 per cent on October 23.

High interbank rates prompted many banks to offer generous deposit rates in a bid to attract retail deposits to cover their Hong Kong dollar positions.

The one-month to three-month deposit rates once shot up to a high of 20 per cent at some foreign banks which lack local currency deposits, but that was still lower than the interbank rates of the same maturities, which hovered around 35 to 50 per cent during that week.