Deposits in the Hong Kong banking system reversed their declining trend over the past two months and achieved a 1.4 per cent increase last month to $2.71 trillion, reflecting the effects of the tax waiver on interest earned by corporate deposits.
Hong Kong dollar deposits grew 1 per cent to $1.55 trillion while foreign currency deposits jumped 2 per cent to $1.15 trillion.
The Government said last month it would waive the tax on interest income earned by corporate deposits in the Hong Kong banking system, aimed at boosting the system's liquidity and easing the credit crunch.
This increase in deposits, however, appeared to have failed to encourage lending activities.
Loans declined 1.8 per cent to $3.59 trillion.
Domestic loans decreased slightly by 0.7 per cent last month.
