AnnualReport-1939

July

August

September

October

November

December

A 3

1/21/1

1/29/

1/23

1/2/10

1/2/3/

On 11th September, 1939, it was notified for public information that the Exchange Fund had arranged to sell sterling up to any amount that might be required to the three note-issuing banks at the rate of 1s 2.18d, and to buy sterling up to any amount from those banks at 1s 3d. These three banks (i.e., the Hong Kong and Shanghai Banking Corporation, the Chartered Bank of India, Australia and China and the Mercantile Bank of India, Limited) undertook to sell sterling to other banks and to the public at not less than 1s 2.35d and to buy sterling from other banks and the public at not more than 1s 3.2d for ready delivery in each case.

7. There was a slight decrease in the circulation of bank notes and of Government $1 notes, the figures being as follows:-

31.12.38. 31.12.39. Government $1 notes $ 5,571,000 $ 6,443,000 Chartered Bank of India, Australia and China 24,852,657 25,521,624 Hong Kong and Shanghai Banking Corporation 210,197,678 195,232,228 Mercantile Bank of India, Ltd. 4,441,620 4,843,727 $245,062,955 $232,040,579

8. Statements of the position of the Exchange Fund were made, in accordance with the now established practice, on the 30th June, 1939, and the 5th January, 1940, showing the position of the Fund at 31st December, 1938, and 30th June, 1939, respectively. The figures of the Certificates of Indebtedness outstanding and the total assets of the Fund were as follows:-

December 31st, 1938 June 30th, 1939 Certificates of Indebtedness (in sterling, converted at middle market rates). £11,945,930 £11,907,554 Assets. £13,035,370 £13,226,195

9. During 1939 the advantages resulting from the steadiness of the exchange and the system of managed currency continued to be enjoyed and little difficulty was experienced in maintaining the Hong Kong dollar at a steady rate of exchange on sterling when the decline in value of the Chinese dollar took place. It would appear to be the general desire of the business community that the Hong Kong dollar should not be allowed to follow the Chinese dollar.