CONFIDENTIAL ##

For discussion

on 17th December 1974

RECICL

31 DE 1974

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FRYS

XCC(74)99

Copy No

32

MEMORANDUM FOR EXECUTIVE COUNCIL

EXCHANGE FUND (AMENDMENT) BILL 1975

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of 70

Annexed to this memorandum for the consideration of Honourable Members is the Exchange Fund (Amendment) Bill 1975.

2

This short bill seeks only to amend section 3(2) of the Exchange Fund Ordinance (Chapter 66).

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The Govern

Subsequently sought permission

this charge.

Section 3(2) of the Ordinance provides that the Fund may be held in Hong Kong currency or in any other currency or in gold or silver or may be invested in the securities approved by the Secretary of State. The same section authorises the Financial Secretary to buy or sell currency for immediate delivery. Clause 2 of the bill seeks to amend section 3(2) of the Ordinance so that the Financial Secretary may buy or sell currency in the forward foreign exchange market and follows a recommendation made by the Exchange Fund Advisory

Committee established under section 3(1) of the Ordinance. In making

this recommendation the Committee commented that:

as the Fund was no longer required to keep all of its assets in sterling, more sophisticated weapons were needed to protect the exchange value of the currency of Hong Kong and this included operations in the forward market".

d

B/E

had no

ect rojectio indeed, the

thought

it overdue.

207

ENTRY

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Honourable Members will be asked to advise whether the Exchange Fund (Amendment) Bill 1975, as annexed, should be intro- duced into the Legislative Council.

(The Accountant General (Mr D.W.A. BLYE) will attend

before the Council for the discussion of this item).

12th December 1974

(SCR 9/2321/56IV)

n.

Maya I think

we

COUNCIL CHAMBER must consult

FRD about the implications And 2/6

ther. Strant

This will

C.S. 166

fine

7.a.

Hong Kong quenter fusibility in

the monagement of hen

спининсу

in

exchange and seems a these days of starting's

conti

sensible measure pantieulang particularly CONFIDENTIAL debility.

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