1986-07-15 16:23 MONETARY AFFAIRS BRANCH.
852 5 865 6146 P.09
8.
(a) HSBC maintains a Hong Kong dollar account
(the "Account") with the Exchange Fund;
(b)
(c)
(a)
(e)
(f)
(g)
(h)
(i)
HSBC aims to maintain a balance (the "Balance") in that account no less than the net clearing balance ("NCB") of the rest of the banking system;
no interest is paid on credit balances in the Account;
if the Balance falls short of the NCB, HSBC pays interest on the shortfall to the Exchange Fund;
if NCB is in debit, HSBC pays interest on the debit amount to the Exchange Fund;
up to a certain amount, the rate of interest payable by HSBC under (d) and (e) is BLR or Hong Kong interbank offered rate (HIBOR), whichever is higher. Beyond that amount, the interest rate payable is 3% over BLR O HIBOR, whichever is higher. circumstances,
In exceptional an alternative rate may be determined by the Financial Secretary, after consultation with HSBC;
the Exchange Fund will use the Account, at its discretion, to effect settlement of its Hong Kong dollar transactions with HSBC;
the Exchange Fund will also use the Account, at its discretion, to effect settlement of its Hong Kong dollar transactions with other licensed banks;
in case of (h), the Exchange Fund will either credit or debit the Account and HSBC will correspondingly credit or debit the clearing accounts of banks dealing with the Exchange Fund.
Along with these new accounting arrangements between the Exchange Fund and HSBC, the Treasury will also maintain a Hong Kong dollar account with the Exchange Fund where money transferred from the General Revenue to the Exchange Fund in return for interest bearing Debt Certificates will be accounted for. additional mechanism for the Exchange Fund to influence
This provides an the supply of money in the interbank market.