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Sir,
LAST
PAPER
05/1
SPEECH BY THE HONOURABLE THE FINANCIAL SECRETARY IN LEGISLATIVE COUNCIL: WEDNESDAY 11 MARCH 1987
MOTION ON THE EXCHANGE FUND ORDINANCE)
In moving the Second Reading of the
Appropriation Bill 1987 a fortnight ago, I referred
to the prudent build up in the Government's fiscal
Indeed, as I said, by the end of the
reserves
(1).
current financial year, our balances on the General
Revenue Account and in the various funds will have
accumulated to about $20 billion and $12 billion
respectively, or a total of $32 billion.
2.
The bulk of the Government's accumulated
balances on the General Revenue Account and in the various
funds is invested by the Treasury with the Exchange Fund
against the issue by the Fund of interest-bearing debt
certificates.
This is done so as to avoid these reserves
having to bear the exchange risks arising from investments
in foreign currency assets, by effectively transferring
the risks to the Exchange Fund. Section 3(4) of the
Exchange Fund Ordinance limits the amount which the Fund
may borrow from any sources; and under section 3(5) this
(1)
/limit
1987-88 Budget Speech, paragraphs 68 and 69.
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