Deposits with authorised institutions decreased marginally in December, reflecting a small 0.3% fall in Hong Kong dollar deposits, according to statistics released today by the Monetary Authority.

The latter fall was due to a decline in time deposits, which exceeded increases in demand and savings deposits.

Foreign currency deposits were little changed during the month, as a decrease in US dollar deposits was nearly offset by a rise in other foreign currency deposits.

Total loans and advances shrank in December. Loans for use outside Hong Kong fell by 2.1%, while loans for use in Hong Kong rose by 0.2%.

Analysed by currency, Hong Kong dollar denominated loans were virtually unchanged while foreign currency loans decreased. The Hong Kong dollar loan-to-deposit ratio edged up slightly to 88.5%.

In the December quarter, domestic credit registered a small decline. An analysis by economic use reveals that this was in part attributable to decreases in loans for mortgages; and wholesale and retail trade, reflecting the weak consumer demand.

Lending to stockbrokers contracted for the two consecutive quarters. In other sectors, loans for building, construction, property development and investment; transport and transport equipment; and financial concerns grew slightly.

On a seasonally adjusted basis, Hong Kong dollar M1 increased by 2.4% during the month and 12.7% over a year ago. Unadjusted Hong Kong dollar M2 and M3 shrank by 0.3% and 0.2% respectively. They were 0.7% and 0.6% respectively lower than the levels a year ago.