A 3
2. LOANS.
7. As regards loans the position remains that of the $25,000,000 authorized by the Dollar Loan Ordinance of 1934, $14,000,000 has been issued. The balance of $11,000,000 is available for issue when the funds are required, expenditure being advanced from general surplus balances in the meanwhile. This system is being continued for the present as the liquid resources available appear sufficient to meet the immediate needs but the necessity of issuing the remainder of the loan as soon as circumstances require is kept in mind.
3. CURRENCY.
8. The currency situation remained stable during the year. The exchange rate continued to be controlled by the operations of the Exchange Fund set up under the Currency Ordinance, 1935, and fluctuations in the rate were small. The Treasury average rates for each month were as follows:
January 1/2¾ February 1/2¾ March 1/2¾ April 1/2¾ May 1/2 13/16 June 1/2 13/16 July August 1/2¾ September 1/2¾ October 1/2¾ November 1/2¾ December 1/2 13/16It should be noted that the market rates were in general somewhat above the official rates quoted above. The fall in exchange in the spring was due to the temporary disturbance caused by the sharp decline in the value of the Shanghai dollar which commenced then.
10. There was a small further increase in the circulation of bank notes and of Government $1 notes, the figures being as follows:
31.12.37 31.12.38 Government $1 notes $ 3,625,000 $ 5,571,000 Chartered Bank of India, Australia and China 25,172,604 24,852,657 Hong Kong and Shanghai Banking Corporation 199,689,793 210,197,678 Mercantile Bank of India, Ltd. 5,175,570 4,441,620 $233,662,967 $245,062,955