G.F. 323
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20.
of the increased lending abroad; overseas banks with branches in Hong
Kong were using their Hong Kong branches to arrange loans outside Hong
Kong the money for which was coming from head office. By December 1976
the liabilities due to banks abroad were 30% higher than a year earlier.
42.
Notwithstanding increased bank lending, the liquidity ratio at
the end of 1976 was 45.3; compared to 49.8% at the end of 1975 and also
at the end of June 1976.
Table 23 J
The exchange rate
43.
At the end of December 1975 the exchange rate for the Hong
Kong dollar against the United States dollar was about HK5.04 US$1.
The Hong Kong dollar strengthened against the US dollar during the first
half of 1976 reaching around HK$4.88 = US$1 at the beginning of June
1976. It slightly weakened in July but strengthened sharply from the
middle of October and reached HK$4.67
=
US$1 at the end ● December
1976. The Hong Kong dollar had thus appreciated against the US dollar
by 7.8% during 1976.
44.
Appreciation
in the overall value of the Hong Kong dollar in
1976, as measured by a trade-weighted average of the currencies of Hong
Kong's major trading partners, was smaller because of the strengthened
Deutschemark which compensated for the depreciation of Sterling and the
US dollar. The effective exchange rate index at the end of December
1976 was 114.4 (16th December 1971 100) compared with 107.4 a year
ago, representing an appreciation of 6.5%. During the first half of
1976, however, the appreciation in the overall value of the Hong Kong
dollar was slightly larger than its appreciation against the US dollar.
The effective exchange rate index appreciated by 2.2% between the end
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