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one believe
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and any failure which leaves members of the public deprived
of their savings cannot be ignored. The Financial Secretary will shortly
be bringing before Executive Council further amendments to the Banking
and Deposit-taking Companies Ordinances to take account of experience
gained in the recent troubles.
The foreign exchange market has also been going through a
volatile period, partly due to domestic anxieties, including anxieties
about the future of Hong Kong, and partly due to the sustained worldwide
strength of the US dollar. As a result the Hong Kong dollar has fallen
to a point far below that which the underlying strength of the economy
would determine.
Let me make two things absolutely clear. First, the Govemment
is concerned about the present level of the exchange rate, in particular
its inflationary implications. Secondly, and I apologise for stating the
obvious to internationally-minded members of this audience, but it is a
point which some of the more insular local commentators often fail to
understand, in a world of freely floating exchange rates, exchange rates
are not determined by govemments. This does not mean, of course, that
govemments cannot exert some influence. They can and do. But governments
cannot held the rate at a point which the market will not sustain
particularly in an economy so open and internationally oriented as this
one.
Despite recent difficulties, I believe the Hong Kong economy
is beginning to recover and will enter a new growth phase. But for this
to be sustained there must be an appropriate economic and social
infrastructure. At present, Goverment is committed to an expenditure
of $25 billion on capital projects already approved to start (I shall
be speaking throughout in Hong Kong dollar terms) and, despite short-term
/budgetary difficulties, .....................