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Extract from the Times -7 hov. 1929.
Hong-kong Currency Development
A sharp decline has recently occurred! in the Hong-kong exchange. At the beginning of October the rate was quoted! at about 1s. 11d., whereas the latest quotation is about Is. 9d. The move- ment is tlue to the decision to revert to the free circulation of the British silver dollar in Hong-kong. For years past the silver dollar, though the monetary unit of the colony, has never circulated in Hong- kong, all transactions having been based on the notes of one or other of the three banks possessing the right to issue notes in the colony-namely,, the Hongkong and Shanghai Banking Corporation, the Chartered Bank of India, Australia, and China, and the Mercantile Bank of India. As a result the exchange, though a silver one based on the monetary unit of the colony, remained until lately compara- tively steady notwithstanding the fall in the price of silver, the consequence of which was that notes went to a premium of about 12 to 15 per cent. over the silver dollar, that is to say over the coin in which the notes are payable. The de-. cision has caused the exchange to fall to a point approximating to the cost at which British dollars can be laid down in Hong-kong. Advantage, however, has been taken of the profit recently obtain- able from coining dollars and sending them to Hong-kong against a purchase of exchange, and, as was mentioned in our columns, orders for the coinage of British dollars have been placed with the Royal Mint. In fact, it appears that so many dollars are being coined that there is a prospect of a redundancy of the coins in the colony. Je of Ne
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