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بار
2 -
Fiscal reserves are transferred to the Exchange
Fund against the issue of Debt Certificates. These Debt
Certi
tificates are interest-bearing and are held by the
Treasury.
In other words, fiscal reserves are invested in
Debt Certificates issued by the Exchange Fund, and these
investments earn interest as if the money were deposited
with a bank. Interest earned is credited to the general
revenue and is clearly, fully and publicly accounted for as
interest income under the revenue Head, Properties and
Investments in the same manner as, for example, profits tax under the Head, Internal Revenue.
بھر
The rationale underlying the placing of fiscal
reserves on deposit with the Exchange Fund and not
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investing the money in, for example, Hong Kong stocks is
very simple. First, there is the security of the principal
sum; secondly, the reasonableness of the rate of return
offered; and, lastly, there is simply no other single
avenue for Hong Kong dollar investment of comparable
quality capable of absorbing the large amount of money
involved without adversely affecting monetary conditions.
It is possible, of course, for fiscal reserves to be
invested by the Treasury in foreign currency assets, but
then the general revenue will be assuming exchange risks.
The assumption of such risks would be improper. Indeed,
this was recognised in 1976 and as a consequence the
management of the foreign currency assets of the Government
Sir was transferred to the Exchange Fund. I believe that the
present arrangements are in the best interests of the
public.