HKS/USSI
4.9706
4.9850
5.0050
5.0250
5.0450
5.0650
5.0850
5.1050
5.1250
5.1450
5.1650
5.1850
5.1994
Diagram 3 Hong Kong Dollar/US Dollar Rate Movements, 15 February-31 December 1973
(Central rate HK$5.085=US$1)
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Feb Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
1973
54. From May 1973 onwards, the Hong Kong dollar was relatively stronger in terms of the United States dollar. In the period mid- May to mid-July, the United States dollar weakened considerably in Hong Kong and, thereafter, until the beginning of September, it rapidly strengthened. This movement in the rate was very largely a reflection of the intensity and subsequent easing of selling pressure on the United States dollar which occurred in world foreign exchange markets in these months. During the last four months of the year, the rate moved towards, and settled around, the central rate despite the world-wide strengthening of the United States dollar. This was due to local liquidity needs which created an off-setting demand for Hong Kong dollars.
External Value of the Hong Kong Dollar
55. In terms of a trade-weighted average of the currencies of Hong Kong's principal trading partners (other than the United States), the value of the Hong Kong dollar was fairly stable in the first four months of 1973, but it depreciated, with the pressure on the United States dollar, in May, June and July. As this pressure eased, the Hong Kong dollar appre- ciated against other currencies and, with the
18
further strengthening of the United States dollar towards the end of the year, the Hong Kong dollar appreciated quite sharply. The cumulative appreciation of the Hong Kong dollar, in terms of other currencies, for 1973 as a whole was 4%.