- 9
2.
Sir, it was against this background that I formed
the view that I should exercise my powers under section
་
3(1) of the Exchange Fund Ordinance to use the Exchange
Fund to put together an arrangement so that the Hong Kong
Futures Guarantee Corporation could meet its obligations.
Mr. David Li may not consider these as cogent economic
reasons", but I do. Mr. POON Chi-fai has questioned the use of the fund, but let me say that it is my
responsibility as Financial Secretary to use the Exchange
Fund for such purposes as the Financial Secretary thinks
fit" to stabilise the exchange value of our currency.
Members may wish to note in this connection that prior to
the formal involvement of Government in talks leading to
the rescue package, there had been adverse pressure on the
exchange rate requiring substantial intervention from the
Exchange Fund. It is significant that on the emergence of
the rescue package that pressure eased.
la
22.
se
Mr. Martin Lee said that he had it on good
authority that I had come to the decision to use the
Exchange Fund without any consultation with the Exchange
Fund Advisory Committee. The fact of the matter is simply
that I am not required by section 3(1) of the Exchange Fund
Ordinance to consult whenever I use the Exchange Fund.
Indeed, it would be impractical to do so. I agree that
section 3(1) of the Exchange Fund Ordinance requires that
the Financial Secretary's control of the Exchange Fund
shall be exercised in consultation with the Exchange Fund