June
purposes show that at the end of September, the monetary sector had spot foreign currency assets and liabilities amounting to $761.9 billion and $792.5 billion
respectively. The corresponding figures at the end of
were $621.1 billion and $648.5 billion. Thus, the
sector's net spot foreign currency liabilities rose by $3.3 billion during the quarter. Over the same period, the sector's forward foreign currency position showed an
increase in net assets from $48.9 billion to $56.0
billion. The sector's net open (spot plus forward) position in foreign currencies thus amounted to assets of
$25.4 billion at the end of September.
The foreign exchange market
However,
3.11
The Hong Kong dollar held steady in July at around $7.20 against the US dollar and at a trade-weighted
exchange rate index of around 74.0, notwithstanding the
two downward adjustments in local interest rates.
the Hong Kong dollar again came under
considerable downward
pressure in August and September amid mounting anxiety over the future of Hong Kong. In addition, the US dollar assumed renewed strength
Although local interest rates were adjusted
upwards by 1 1/2 percentage points on 9 September, the
dollar continued to weaken sharply. On
worldwide.
Hong Kong
24 September,
a Saturday morning, the exchange rate against the US dollar was quoted in a thin market at $9.50
and the trade-weighted index touched 57.2. Firm official
statements over the week-end and the announcement on the
following Monday of
an increase in interest rates of
3 percentage points effective from Tuesday 27 September had the effect of stabilizing the exchange rate at around
$8.15 to the US dollar throughout the last week of September. At the end of the month, the Hong Kong dollar
22
/stood