Hong Kong Dollar Deposits Rise 1.3% as RMB Holdings Near RMB1T Mark

Hong Kong’s financial base confirmed diverging forex preferences in January, with native greenback deposits climbing 1.3% at the same time as overseas forex holdings retreated, based on information launched by the Hong Kong Financial Authority on February 27.

The headline quantity—a 0.1% dip in whole deposits at approved establishments—masks extra attention-grabbing actions beneath. International forex deposits dropped 1.1%, pushed primarily by company fund flows, whereas renminbi deposits jumped 3.5% to achieve RMB993.9 billion. That is knocking on the door of the psychologically important RMB1 trillion stage.

Lending Exercise Picks Up

Whole loans and advances grew 1.1% through the month. Home lending (together with commerce finance) rose 0.7%, however the true motion was in offshore-directed loans, which climbed 2.2%. The loan-to-deposit ratio for Hong Kong {dollars} really tightened to 72.3% from 72.9% in December—deposits grew sooner than lending demand.

Cross-border renminbi commerce settlement totaled RMB1,016.4 billion in January, down from RMB1,177.4 billion in December. The pullback doubtless displays typical post-year-end normalization relatively than any structural shift.

Cash Provide Indicators

Here is the place it will get attention-grabbing for market watchers. Seasonally-adjusted Hong Kong greenback M1 surged 2.6% month-over-month and sits 16.9% larger than January 2025. The HKMA attributed this partly to “investment-related actions”—a well mannered approach of claiming cash is shifting into extra liquid positions.

Broader measures confirmed steadier progress. HKD M2 and M3 each elevated 1.1% month-to-month, up 3.8% year-over-year. Whole M2 and M3 had been basically flat for January however stay roughly 9.9% above year-ago ranges.

What Merchants Ought to Watch

The Cling Seng Index (HK50) traded at 26,649 factors on February 27, up 1.02% on the session. The mixture of rising native forex deposits and that M1 spike suggests home liquidity circumstances stay supportive, at the same time as world charge uncertainty persists.

The HKMA cautioned towards studying an excessive amount of into single-month fluctuations, noting that seasonal funding calls for and enterprise cycles create noise within the information. Nonetheless, the renminbi deposit development bears watching—a break above RMB1 trillion would mark a milestone for offshore yuan holdings within the metropolis.

The authority additionally launched separate information on Hong Kong’s overseas forex reserves and liquidity place for January, whereas individually asserting plans to review built-in infrastructure connecting equities, bonds, and digital belongings by means of its CMU OmniClear platform.

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