Total deposits held with Guernsey banks at the end of the first quarter fell by £699 million from the end of 1997 to £48,658 million, a modest drop of 1.4%.
Two trends emerged:
- sterling deposits rose by £489 million
- the sterling equivalent value of currencies other than sterling - mainly US Dollars, Deutschmarks and Swiss Francs - fell by £1,160 million.
It is estimated that the effect of sterling's strength against the major currencies at the quarter end accounted for some £566 million of the decline. However, since the period end, sterling has eased somewhat against these currencies and the position might well unwind next quarter.
The currency breakdown is now split 35% sterling and 65% other currency deposits. Local inter-bank activity rose by £450 million.
