In March 2025, Hong Kong saw an increase in total deposits and loans, with significant changes in renminbi deposits. Monetary M2 and M3 also rose, influenced by various factors.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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As of 30 April 2025, the Hong Kong Monetary Authority reported that total deposits with authorized institutions in March 2025 increased by 0.8%, with a significant rise of 1.6% in Hong Kong dollar deposits and a marginal 0.1% increase in foreign currency deposits. Over the first quarter of 2025, total deposits and Hong Kong dollar deposits grew by 3.5% and 5.1%, respectively.
The value of reminbi ("RMB") deposits in Hong Kong declined by 7.3% in March, reaching RMB959.8 billion, primarily due to corporate fund flows. Concurrently, the total remittance of RMB for cross-border trade settlement rose to RMB1,184.0 billion, up from RMB1,064.1 billion in February.
Changes in deposits are influenced by various factors such as interest rate fluctuations and corporate fund-raising activities. Consequently, it is advisable to monitor long-term trends rather than over-interpreting monthly fluctuations.
Total loans and advances also increased by 1.1% in March 2025, rising by 0.6% in the first quarter. The loan-to-deposit ratio for Hong Kong dollars decreased to 72.3% in March, driven by a rise in deposits and a fall in loans. Loans for use in Hong Kong, including trade finance, increased by 1.2% in March, while those for use outside Hong Kong grew by 0.8%.
For the first quarter of 2025, loans for use in Hong Kong increased by 0.5% after a 0.1% decrease in the preceding quarter. By economic use, loans to financial institutions grew, whereas loans to the building, construction, property development, and investment sectors decreased.
Hong Kong dollar M2 and M3 both experienced a 1.5% increase in March and a 7.7% year-on-year growth. Similarly, the seasonally-adjusted Hong Kong dollar M1 increased by 0.8% in March and grew by 7.0% compared to a year earlier. Total M2 and total M3 also increased by 0.7% and 10.8% over the year.
Monthly monetary statistics can be volatile due to factors such as seasonal funding demands, initial public offerings ("IPOs"), and business and investment activities. Therefore, it is crucial to exercise caution when interpreting these statistics.
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