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Appendix 5

(Chapter 3: Financial System and Economy)

Exchange Value of the Hong Kong Dollar

(A) When a fixed exchange rate was maintained against one or more other currencies

Par value of

the HK$ in

grams of fine gold

£1 =

USSI

HK$

HK$

December 18, 1946

IMF parities established; Hong Kong dollar is pegged to sterling

0.223834

16.00

3.970

September 18, 1949

Hong Kong dollar devalued pari passu with sterling by 30.5%

0.155517

16.00

5.714

November 20, 1967

Hong Kong dollar devalued pari passu with sterling by 14.3%

0.133300

16.00

6.667

November 23, 1967

Hong Kong dollar revalued by 10%, including against sterling, but continues pegged to sterling, at new rate

0.146631

14.55

6.061

December 18, 1971

As part of the general currency realignment, Hong Kong dollar and sterling appreciate by 8.57% against US dollar. As a result of USA terminating, in August 1971, the convertibility of US dollar into gold, gold par value no longer has a practical meaning. IMF begins to adopt the SDR as its accounting unit

July 6, 1972

Hong Kong dollar pegged to US dollar following the floating of sterling

February 14, 1973

US dollar devalued; Hong Kong dollar remains pegged, at new rate

November 26, 1974

Hong Kong dollar allowed to float, ie the government no longer undertakes to maintain a particular rate against any other currency

(B) Since the currency was floated

£

End of period

1974

1980

1981

1982

=

SDRI=

HK$

-

=

14.55

5.582

6.061

5.650

6.134

5.085

6.134

Trade-weighted Index*

(18.12.71 = 100)

DM

US$

¥

(HK dollars to one unit of foreign currency)

SDR

11.53

4.910

2.03

0.0164

6.012

105.9

12.27

5.130

2.61

0.0253

6.543

88.2

10.88

5.675

2.52

0.0260

6.605

85.9

10.58

6.495

2.73

0.0278

7.165

80.1

Note:* The trade-weighted exchange rate index is derived from a weighted average of nominal exchange rates of the Hong Kong dollar against the

currencies of 15 principal trading partners.

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