Deposits With Guernsey Banks Little Changed

The total of deposits held by Guernsey banks at the end of December fell by £508 million from the previous quarter, a decrease of 1.2%. Total deposits now stand at £43,324 million.

Despite the overall decrease in deposits, nearly all the banks saw their deposit base increase with a number increasing strongly. However, the effect of large exchange rate movements between the last two reporting dates, for instance the dollar from 1.56 to 1.69 to the pound, and the drop in local interbank activity by £640 million to £1,610 million, more than outweighed the increases. With such a large percentage of the deposit base in currencies other than sterling (68%) the rate of exchange has a marked effect on the conversion of currency deposits to sterling. Indeed in the last quarter the exchange rate movements would have affected adversely total deposits by as much as £2,400 million.