F
2
FRIDAY, JULY 15, 1988
༣་
(F)
(Q)
(H)
UP TO A CERTAIN AMOUNT, THE RATE OF INTEREST PAYABLE BY HSBC WILL BE BLR OR HIBOR, WHICHEVER IS HIGHER. BEYOND THAT AMOUNT, THE INTEREST RATE PAYABLE WILL BE 3% OVER BLR OR HIBOR, WHICHEVER IS HIGHER. IN EXCEPTIONAL CIRCUMSTANCES, AN ALTERNATIVE RATE MAY BE DETERMINED BY THE FINANCIAL SECRETARY, AFTER CONSULTATION WITH HSBC;
THE EXCHANGE FUND WILL USE THE ACCOUNT, AT ITS DISCRETION, TO EFFECT SETTLEMENT OF ITS HONG KONG DOLLAR TRANSACTIONS WITH HSBC;
THE EXCHANGE FUND WILL ALSO USE THE ACCOUNT, AT ITS DISCRETION, TO EFFECT SETTLEMENT OF ITS HONG KONG DOLLAR TRANSACTIONS WITH OTHER LICENSED BANKS.
WITH THE NEW ACCOUNTING ARRANGEMENTS, THE EXCHANGE FUND WILL IN EFFECT BECOME THE ULTIMATE PROVIDER OF LIQUIDITY TO THE INTERBANK MARKET. IT WILL BE CAPABLE OF INFLUENCING MUCH MORE EFFECTIVELY THE AVAILABILITY AND THE PRICE OF MONEY IN THE INTERBANK MARKET AND WILL BE IN A MUCH BETTER POSITION TO MAINTAIN EXCHANGE RATE STABILITY WITHIN THE FRAMEWORK OF THE LINKED EXCHANGE RATE SYSTEM.
4. THE NEW ACCOUNTING ARRANGEMENTS HAVE NO EFFECT
ON THE DAY TO DAY OPERATION OF LICENSED BANKS IN HONG KONG, OTHER THAN HSBC, WHICH, IN ADDITION TO BECOMING MORE ACTIVE AS A CONSEQUENCE OF HAVING TO MAINTAIN EQUILIBRIUM BETWEEN THE BALANCE AND THE NET CLEARING BALANCE, WILL BE ABLE TO DIRECT ITS OTHER ACTIVITIES IN THE MONEY AND FOREIGN EXCHANGE MARKETS MORE TOWARDS ITS OWN COMMERCIAL REQUIREMENTS.
5.
THESE ARRANGEMENTS WILL COME INTO EFFECT ON MONDAY, 18 JULY 1988. THE SECRETARY FOR MONETARY AFFAIRS HAS TODAY SENT OUT A PAPER EXPLAINING IN DETAIL THE NEW ACCOUNTING ARRANGEMENTS TO ALL LICENSED BANKS. A COPY OF THE PAPER IS ATTACHED.
PRESS ENQUIRIES:
119BC
MONETARY AFFAIRS BRANCH
CHRIS PAVLOU
5-8223800
JOSEPH YAM
5-290021
MICHAEL BROADBENT
5-8224920
13