XN000022-1983-11-24 — Page 6

THURSDAY, NOVEMBER 24, 1983

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IMPORTS AND RE-EXPORTS ALSO INCREASED RAPIDLY IN THE THIRD QUARTER: IMPORTS SHOWED A YEAR-ON-YEAR GROWTH RATE IN REAL TERMS OF ABOUT 12 PER CENT, WHILE RE-EXPORTS SHOWED A YEAR-ON-YEAR GROWTH RATE IN REAL TERMS OF ABOUT 21 PER CENT.

THE REPORT POINTS OUT THAT SINCE THE GROWTH RATE OF THE VALUE OF TOTAL EXPORTS (DOMESTIC EXPORTS PLUS RE-EXPORTS), AT 32 PER CENT, WAS FASTER THAN THAT OF IMPORTS, AT 28 PER CENT, THE VISIBLE TRADE GAP NARROWED TO 4 PER CENT IN THE THIRD QUARTER OF THIS YEAR FROM 6 PER CENT IN THE THIRD QUARTER OF 1982.

ON THE FINANCIAL SECTOR, THE REPORT NOTES THE FOLLOWING DEVELOPMENTS DURING THE THIRD QUARTER OF THIS YEAR:

FIRST, NERVOUSNESS ABOUT THE FUTURE OF HONG KONG, ALONG WITH THE RENEWED STRENGTH OF THE US DOLLAR, CONTINUED TO DEPRESS THE EXCHANGE VALUE OF THE HONG KONG DOLLAR DURING THE THIRD QUARTER.

THIS WEAKNESS, PARTICULARLY IN THE MIDDLE OF SEPTEMBER, WAS UNJUSTIFIED IN TERMS OF THE CURRENT STRENGTH OF THE ECONOMY.

HOWEVER, THE PERSISTENT AND ACCELERATING DEPRECIATION THAT IT CAUSED FORCED THE GOVERNMENT TO CHANGE HONG KONG'S EXCHANGE RATE DETERMINATION SYSTEM IN OCTOBER TO ONE WHICH LINKED THE VALUE OF THE HONG KONG DOLLAR TO THAT OF THE US DOLLAR.

SECOND, BANK DEPOSIT RATES WERE ALTERED ON A NUMBER OF OCCASIONS DURING THE THIRD QUARTER IN THE LIGHT OF EXCHANGE RATE DEVELOPMENTS.

THIRD, ON SEPTEMBER 27, TO AVOID AN UNSTABLE SITUATION DEVELOPING IN THE BANKING SECTOR, THE GOVERNMENT PASSED URGENT LEGISLATION TO TAKE OVER THE HANG LUNG BANK WHICH, AFTER A YEAR OF MOUNTING PROBLEMS, FOUND ITSELF UNABLE TO MEET ITS OBLIGATIONS WITHOUT GOVERNMENT SUPPORT,

FOURTH, THE MONEY SUPPLY FIGURES CONTINUED TO BE DISTORTED BY THE EXISTENCE OF SWAP DEPOSITS AND BY THE VALUATION EFFECT OF THE WEAKER HONG KONG DOLLAR, THUS MAKING INTERPRETATION DIFFICULT.

NEVERTHELESS, THE FIGURES SUGGEST THAT THE UNDERLYING GROWTH RATE OF TOTAL MONEY SUPPLY DURING THE THIRD QUARTER WAS MODERATE.

DURING THIS PERIOD, TOTAL LOANS AND ADVANCES EXTENDED BY BANKS AND DEPOSIT-TAKING COMPANIES INCREASED SLIGHTLY.

ON THE LABOUR SECTOR, THE REPORT SAYS THAT BOTH THE UNEMPLOYMENT RATE AND THE UNDEREMPLOYMENT RATE FELL FURTHER IN THE THIRD QUARTER, FROM THE PEAKS RECORDED EARLIER THIS YEAR.

WHEN JUNE