*. I would be necessaz to obtain actual figures of exchange rates (dollar etail) over several moult's to confrom this mcqustion .p.R.M.
The exchange banks were, therefore, compelled to
obtain Hong Kong dollars (i.e. in effect notes,
since clearances are in notes), to cover their
gold purchases.
sudden is de
12
Quite apart from this demand arising from
the speculative operations of the exchange bankers,
circumstances of a more ordinary nature were leading
to an increase in the demand for Hong Kong dollars.
Imports, for the reasons already indicated, were
small: there was therefore little demand for gold
currency. Exports at the same time were
abnormally high, owing not so much to stimulation of
exports of commodities by low exchange (i.e.,of course, exports to gold countries) for of this there
is no evidence, but owing rather to abnormally large
invisible exports in the shape of remittances from
overseas Chinese, stimulated by the low exchange:
there was therefore a demand for Hong Kong currency
in excess of the Hong Kong demand for gold and the
Hong Kong rate rose to 20% above silver parity or
perhaps,
rather/lagged behind the fall in silver to that
extent.
The normal consequence of such a
situation in any exchange would be the shipment of
bullion. It is curious that the rate was allowed
to rise so far above bullion point (which is
approximately 5% above silver parity) before steps
were actually taken at the beginning of November, to-
wards laying down silver dollars.
Meanwhile, on the mere announcement that
the Government intended to take action, those who had
been speculating on the rise in the premium took
fright.
There was a rush from the dollar and in
about
No comments yet.
Private notes are available after approval.