XN000022-1986-01-15 — Page 4

WEDNESDAY, JANUARY 15, 1986

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POINTS ON EXCHANGE FUND CLAR IF IED

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THE COMPOSITION OF THE EXCHANGE FUND IN TERMS OF FOREIGN CURRENCIES WAS CONFIDENTIAL, FOR IT WAS VERY SENSITIVE INFORMATION AND ANY DISCLOSURE WAS AGAINST THE PUBLIC INTEREST, THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

REPLYING TO A QUESTION BY THE HON LIU LIT-FOR, SIR JOHN HOWEVER NOTED THAT THE BULK OF THE EXCHANGE FUND WAS HELD IN U.S. DOLLARS, DEUTCHMARKS, SWISS FRANCS, DUTCH GUILDERS, YEN, STERLING AND CANADIAN DOLLARS.

SIR JOHN SAID THAT THERE WAS NO UPPER LIMIT TO THE FUND. +AT PRESENT BORROWING FOR THE ACCOUNT OF THE FUND IS SUBJECT TO A LIMIT OF $30 BILLION AS DETERMINED BY THIS COUNCIL, HE SAID.

HE ADDED THAT THE FUND WAS NOT MANIPULATED TO INTERFERE WITH THE INTEREST RATE.

+DEPOSIT RATES ARE SET BY THE HONG KONG ASSOCIATION OF BANKS. THE PRIME RATE IS DETERMINED BY INDIVIDUAL BANKS, HE SAID.

SIR JOHN POINTED OUT THAT PROVISION FOR THE ESTABLISHMENT AND MANAGEMENT OF THE FUND AND THE EMPLOYMENT OF ITS ASSETS IN HONG KONG WAS SET OUT IN THE EXCHANGE FUND ORDINANCE, ENACTED IN 1935 AND LAST AMENDED IN 1984.

CITING THE EXCHANGE FUND ORDINANCE, SIR JOHN SAID THE FUND +SHALL BE USED FOR SUCH PURPOSES AS THE FINANCIAL SECRETARY THINKS FIT AFFECTING, EITHER DIRECTLY OR INDIRECTLY THE EXCHANGE VALUE OF THE CURRENCY OF HONG KONG AND FOR OTHER PURPOSES INCIDENTAL THERETO+.

NEW TDC FUNDING TO BENEFIT TRADE-RELATED ACTIVITIES

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THE NEW FUNDING ARRANGEMENTS FOR THE TRADE DEVELOPMENT COUNCIL, WHICH WILL TAKE EFFECT FROM APRIL 1, THIS YEAR, MAKE IT POSSIBLE FOR ANY SURPLUS OVER THE SUM VOTED FOR THE TDC IN A YEAR, OUT OF REVENUE FROM THE AD VALOREM LEVY IN THE PRECEDING YEAR, LESS THE COST OF COLLECTION, TO BE MADE AVAILABLE FOR FUNDING OTHER TRADE RELATED ACTIVITIES, THE SECRETARY FOR TRADE AND INDUSTRY, THE HON ERIC HO, SAID AT THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

IN REPLY TO A QUESTION BY THE HON THOMAS CLYDESDALE, MR HO SAID THE ADMINISTRATION HAS UNDERTAKEN TO CONSULT THE TDC ON WHICH TRADE RELATED ACTIVITIES SHOULD BE FINANCED FROM THE SOURCE.

+ACCORDINGLY, THE PRIORITIES WILL BE DETERMINED AFTER CONSULTATION WITH THE TDC, HE NOTED,

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