HKMA Half-Yearly Monetary and Financial Stability Report
Download → Report
The Hong Kong Monetary Authority (HKMA) published the March 2023 issue of its Half-Yearly Monetary and Financial Stability Report (Half-Yearly Report).
The Half-Yearly Report provides detailed analyses of the global and local economy, as well as the monetary and financial conditions in Hong Kong. It also examines the recent performance and risks of the local banking sector.
Table of contents
1. Summary and overview
2. Global setting and outlook
3. Domestic economy
4. Monetary and financial conditions5. Banking sector performance
Glossary of terms
Abbreviations
1. Summary and overview
The global growth prospect is expected to weaken going into 2023. The stubbornly high inflation rate, the likelihood of a significant growth slowdown in the US and the Euro area amid the cumulated monetary tightening since 2022, and the recent emergence of banking stress in the US and Europe are increasing the uncertainty of economic outcomes and hence financial market volatility.
Hong Kong’s exchange rate and interbank market continued to trade in a smooth and orderly manner. Following US policy rate hikes, many banks raised their Best Lending Rates. With total deposits increasing modestly in the seven months since end-June 2022, there was no notable sign of outflows from the Hong Kong banking system. Partly reflecting subdued credit demand, bank credit declined modestly during the same period. The residential property market was under pressure in the second half of 2022, before showing some signs of stabilising in early 2023.
Looking ahead, while the relaxation of COVID-19 restrictions should brighten the outlook for the Hong Kong economy, uncertainties related to future US interest rate adjustments, the growth outlook of major advanced economies, and the lingering geopolitical risks, will pose challenges to the banking sector. Banks should stay vigilant against the impacts of these risk factors on the asset quality of their loan portfolios.
First, please LoginComment After ~