WEDNESDAY, MARCH 14, 1984
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+1 PROPOSE THAT THE NET PROCEEDS OF THE BOND ISSUE, AFTER DEFRAYING EXPENSES, SHOULD BE CREDITED TO THE GENERAL REVENUE IN THE FIRST INSTANCE FOR SUBSEQUENT TRANSFER TO THE CAPITAL WORKS RESERVE FUND FOR THE PURPOSE OF PRODUCTIVE CAPITAL INVESTMENT.
*THE ISSUE WILL PROVIDE AN OPPORTUNITY FOR INVESTMENT IN THE FUTURE OF HONG KONG, SIR JOHN SAID.
BILL PROVIDES FOR PAYMENT IN FOREIGN EXCHANGE *****
THE MAIN PURPOSE OF THE EXCHANGE FUND (AMENDMENT) BILL 1984 IS TO PROVIDE IN EXPLICIT TERMS FOR PAYMENT AND REDEMPTION IN RELATION TO CERTIFICATES OF INDEBTEDNESS TO BE MADE IN FOREIGN EXCHANGE, THE FINANCIAL SECRETARY, THE HON SIR JOHN & FARIDGE SAID TODAY.
MOVING THE SECOND READING OF THE BILL, HE SAID THAT SINCE THE INTRODUCTION ON OCTOBER 17, 1983 OF MEASURES TO STABILISE THE EXCHANGE VALUE OF THE HONG KONG DOLLAR, CERTIFICATES OF INDEBTEDNESS HAVE BEEN ISSUED AND REDEEMED AGAINST US DOLLARS AT A FIXED RATE OF HK$7.80 TO US$1.
+THESE CERTIFICATES ARE ISSUED TO THE NOTE-ISSUING BANKS UNDER SECTION 4 OF THE EXCHANGE FUND ORDINANCE AND THEY ARE HELD BY THEM AS COVER FOR THEIR NOTE ISSUES.
+PRIOR TO OCTOBER 17, 1983 SUCH CERTIFICATES WERE ISSUED
AND REDEEMED AGAINST HONG KONG DOLLARS,
+ALTHOUGH THE NEW PRICING ARRANGEMENTS ARE NOT EXPRESSLY PROVIDED FOR IN THE EXCHANGE FUND ORDINANCE, THEY ARE NOT CONSIDERED TO BE CONTRARY TO THE PROVISIONS OF THAT ORDINANCE.
+NEVERTHELESS, IN ORDER TO REMOVE ANY DOUBTS, IT IS PROPOSED THAT SUBSECTIONS (1) AND (2) OF SECTION 4 BE AMENDED SO AS TO PROVIDE IN EXPLICIT TERMS THAT ISSUES AND REDEMPTIONS OF CERTIFICATES OF INDEBTEDNESS MAY BE TRANSACTED NOT ONLY IN HONG KONG DOLLARS BUT ALSO IN FOREIGN EXCHANGE AND AT SUCH A RATE OF EXCHANGE AS MAY BE DETERMINED BY THE FINANCIAL SECRETARY, HE SAID.
FOR THE AVOIDANCE OF DOUBT, SIR JOHN ADDED, HE SHOULD STRESS THAT THE CERTIFICATES WOULD CONTINUE TO BE DENOMINATED IN HONG KONG DOLLARS.
THE BILL ALSO PROPOSED THAT THE ORDINANCE BE AMENDED BY REMOVING THE UNNECESSARY REQUIREMENT UNDER SECTION 3(5) THAT RESOLUTIONS IN THE LEGISLATIVE COUNCIL TO AMEND THE EXCHANGE FUND BORROWING LIMIT MUST BE PROPOSED BY THE GOVERNOR.
THESE AMENDMENTS REQUIRED THE APPROVAL OF THE SECRETARY OF STATE, WHICH HAD BEEN OBTAINED.
THE DEBATE ON THE BILL WAS ADJOURNED TO APRIL 18.
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