म
FOLLOWING IS TEXT OF STATEMENT WHICH THE FINANCIAL SECRETARY
WILL MAKE AT NOON HONG KONG PATIL SATURDAY OCTOBER 15.
TEXT BEGINS:
:: WANT TO TELL YOU ABOUT TWO STEPS WHICH THE GOVERNMENT IS TAKING
NOW TO STABILISE THE EXCHANGE RATE OF THE HONG KONG DOLLAR.
2. FIRST LET ME GIVE YOU SOME BACKGROUND. FOR 37 YEARS FROM 1935 TO JULY 1972 THE HONG KONG DOLLAR WAS PEGGED TO STERLING. XN THOSE DAYS THE STERLING AREA EXISTED AND FOR MOST OF THAT PER:IOD THE INTERNATIONAL MONETARY SYSTEM WAS CHARACTERISED BY FIXED EXCHANGE RATES. FROM 1972 TO NOVEMBER 1974 THE HONG KONG DOLLAR WAS PEGGED TO THE US DOLLAR. SINCE 1974 HONG KONG IN COMMON WITH OTHER MAJOR MARKET ECONOMIES HAS HAD A FREELY FLOATING EXCHANGE RATE. THIS FLOATING SYSTEM HAS SERVED US WELL. HT HAS GIVEN US A MEASURE OF INSULATION FROM THE UPS AND DOWNS OF OTHER ECONOMIES, AND UNDER IT HONG KONG HAS RECORDED VERY HIGH RATES OF ECONOMIC GROWTH. LIVING STANDARDS HAVE RISEN ACCORDINGLY.
3. TOWARDS THE END OF LAST YEAR THE EXCHANGE RATE STARTED MARKEDLY TO WEAKEN, REFLECTING AMONGST OTHER FACTORS UNCERTAINTIES ABOUT
HONG KONG'S FUTURE.
4..BEFORE THE GOVERNMENT ANNOUNCED THREE WEEKS AGO THAT IT WAS CONSIDERING PORPOSALS TO STABILISE THE EXCHANGE RATE CURRENCY DEPRECIATION WAS TENDING HACREASINGLY TO FEED ON ITSELF IN AN UNSTABLE AND IRRATIONAL MANNER. THIS DEPRECIATION WAS NOT JUSTIFIED BY ENTHER CURRENT ECONOMIC DEVELOPMENTS OR FUTURE PROSPECTS. THE ECONOMY HAS REBOUNDED AND US DOING VERY WELL. THERE HIS LITTLE UNEMPLOYMENT AND EXPRTS ARE BOOMING. HONG KONG HAS SUBSTANTIAL FOREIGN CURRENCY RESERVES, A GENERALLY LIQUID BANKING SYSTEM AND VIRTUALLY NO GOVERNMENT DEBT.
5. THE GOVERNMENT HAS BEEN CONCERNED BY THE FALLING EXCHANGE RATE AND HAS DONE EVERYTHING IN REASON, WITHIN THE ESTABLISHED FRAMEWORK, TO ATTEMPT TO STABILISE MT. THESE EFFORTS HAVE ACHIEVED ONLY
LIMITED SUCCESS.
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