The foreign exchange market
3.14
During the first quarter, the exchange value of the
Hong Kong dollar, as measured by the trade-weighted exchange rate index, held up well. After easing from 85.9 at the end
of December 1981 to 84.4 on 18th January 1982, the index moved
between 85.0 and
and 87.0 for most of the following two months.
Influenced by firm money
market rates and perhaps by the higher rates bid by banks for large deposits from 1st March,
it rose to 88.7
to 88.7 at the end of March, 3.3% higher than at the
end of 1981. The import-weighted index rose by 4.5% during
the first quarter, while the export-weighted index rose by
1.6%. Much of the appreciation can be attributed to the
strength of the US dollar against most major currencies, and
to the relative stability of the exchange value of the Hong
Kong dollar against the US dollar. The exchange rate against
the US dollar depreciated by 3% during the first three months
from HK$5.69 = US$1.0 to HK$5.86 (touching HK$5.942 in
mid-February).
The securities, gold and commodity markets
3.15
Trading on the stock market was quieter during the
first quarter, with total turnover 46% less than in the fourth
quarter of 1981. The Hang Seng Index drifted between 1 370
and 1 450 in quiet trading until early February, when the
market began to be affected by the continuing high levels of
US interest rates, the sluggishness of overseas economies and
the depressed domestic property market. Consequently, the index fell sharply and almost continuously to 1 125 on 8th
March. There was then a gradual recovery, encouraged by
declining interest
interest rates
some countries and by favourable
results announced by some companies in Hong Kong, bringing the
index back to 1 166 at the end of March, 17% below the
end-1981 level of 1 406.
in
20
/ 3.16 During