HK dollar deposits fall 25pc on reforms in interest rates

HONG KONG dollar demand deposits fell almost 25 per cent in the year to January, but time deposits rose 18 per cent over the same period, possibly due to deregulation of the interest rate agreement.

According to Hong Kong Monetary Authority (HKMA) figures released yesterday, Hong Kong dollar demand deposits stood at $93.16 billion on January 31, down 23 per cent on the year.

Hong Kong dollar time deposits, adjusted to include foreign currency swap deposits, stood at $656.16 billion, up 18 per cent on January last year.

'Swap deposits fell markedly by 13.7 per cent in January as some of these deposits were switched to Hong Kong dollar time deposits after the second stage of deregulation,' it said.

From January 3, under recent reform, the Hong Kong Association of Banks' interest rate agreement no longer applies to time deposits fixed for more than one week.

US dollar deposits totalled HK$483.26 billion in January, down 2.2 per cent on December, but maintained their upward trend, ending January 11.5 per cent higher than a year earlier, the HKMA said.