Hong Kong Monetary Authority says local currency deposits dropped only 0.1 per cent in November, in further sign of banking system resilience
- Not a sign of funds flowing out, HKMA’s deputy chief executive says
- Active IPO market pushes exchange rate to a two-and-a-half year high in further boost to banking system
Total Hong Kong dollar deposits dropped 0.1 per cent in November, the Hong Kong Monetary Authority said on Tuesday, in a sign the city’s banking system had held up amid the ongoing anti-government protests.
Hong Kong dollar deposits are a key indicator of money flowing in and out of the city, and they have been stable during the seven-month-long anti-government protests. The deposits edged down to HK$6.908 trillion (US$887.1 billion) in November from HK$6.914 trillion, according to monthly statistics issued by the HKMA.
“Clearly this could not be a sign of funds flowing out of the Hong Kong dollar system,” Howard Lee, the HKMA’s deputy chief executive, said in an article published on the de facto central bank’s website on Monday.
On a longer-term basis, Hong Kong dollar deposits rose by 3 per cent during the first 10 months of 2019, while US dollar deposits rose 1.8 per cent, which showed funds had not left the Hong Kong banking system in a big way, Lee said.
A big outflow would mean a weak Hong Kong dollar and a lower aggregate balance with the banking system. Lee added that the HKMA had not needed to defend the currency since April, with the aggregated balance remaining at HK$54 billion.
Meanwhile, in a further boost to the city’s banking system, an active initial public offering market pushed the Hong Kong dollar’s exchange rate to a two-and-a-half year high on Tuesday.