I. Analytical Framework, Concepts, Definitions and Classifications Money aggregates, domestic credit, and external position are derived based on the banking returns submitted by the authorized institutions. M1 consists of legal tender notes and coins held by the public and customers' demand deposits placed with licensed banks. M3 consists of M2 plus customer deposits with restricted license banks and deposit-taking companies and NCDs issued by these institutions held outside the banking sector. Domestic credit consists of trade financing and other loans for use in Hong Kong.
External positions refer to the external claims and liabilities.
For breakdowns by residency, the criteria used to sectorize domestic and external accounts are according to the address of the counterparty. This means, in the case of a company with branches, the business address of the office with which the liabilities or claims were incurred and in the case of an individual, his home address. It is consistent with the IMF's Balance of Payment Manual, Fifth Edition, which is based on a sectoral transactor's center of economic interest. For breakdowns by sector, public sector refers to the Hong Kong SAR government. Data are further broken down into Hong Kong dollar and foreign currency.