XN000022-1986-04-23 — Page 6

WEDNESDAY, APRIL 23, 1986

CURRENCY LINK WILL REMAIN AT $7.80

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IT IS THE GOVERNMENT'S FIRM POLICY TO MAINTAIN THE CURRENCY LINK TO THE US DOLLAR AT $7.80 THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, TOLD THE LEGISLATIVE COUNCIL TODAY WEDNESDAY).

CONCLUDING THE RESUMED BUDGET DEBATE, SIR JOHN WARNED THAT AN INEVITABLE OUTCOME OF FLOTATION WOULD BE TO EXPOSE THE HONG KONG DOLLAR AGAIN TO HUGE INTERNATIONAL SPECULATION.

+HONG KONG NEEDS STABILITY, HE SAID, AND WE CAN HAVE NO IDEA WHETHER THE HONG KONG DOLLAR IN THE ABSENCE OF THE LINK WOULD RISE OR FALL. ITS VALUE WOULD PROBABLY SHIFT LIKE A YO-YO,+

+MOREOVER, IT SHOULD NOT BE FORGOTTEN THAT THE PREVIOUS SYSTEM PROVIDED NO CONTROL OF THE MONEY SUPPLY WHICH WAS ONE FACTOR IN THE PROPERTY COLLAPSE.+

ON SUGGESTIONS CONCERNING MONETARY AGGREGATES, PROMOTING CAPITAL MARKETS AND RELATED MATTERS, SIR JOHN SUGGESTED THAT A STUDY BE CONDUCTED FIRST BY A SUB-COMMITTEE OF THE HONG KONG ASSOCIATION OF BANKS FOR PRESENTATION TO THE BANKING ADVISORY COMMITTEE.

+ IF THEY AGREE, THE GOVERNMENT MUST FIND THE IR JOINT VIEWS PERSUASIVE SINCE THEY ARE BOTH IMPORTANT STATUTORY BODIES,+ HE SAID.

SIR JOHN NOTED THAT HE HAD MADE NO PROPOSAL FOR SIGNIFICANT INCREASES IN TAXES IN REAL TERMS THIS YEAR AS HIS MAIN PURPOSE WAS TO MAINTAIN THE YIELD.

+TO THIS END, BANKING AND DTC FEES, LIKE VEHICLE AND PETROL TAXATION, HAVE GONE UP ONLY MODERATELY IN MONEY TERMS,+ HE ADDED.

SIR JOHN SAID HE FULLY SHARED THE VIEW EXPRESSED ABOUT THE IMPORTANCE OF THE SECURITIES COMMISSION, WHICH HE DESCRIBED AS +AN EXCELLENT, BROADLY BASED BODY WITH A FIRST-CLASS CHAIRMAN.+

+SECURITIES AND BANKING ISSUES ARE CLOSELY ALLIED. IT IS FOR THIS REASON THAT LATER THIS SUMMER THE COMMISSIONER FOR SECURITIES LIKE THE BANKING COMMISSIONER WILL REPORT TO THE SECRETARY FOR MONETARY AFFAIRS, SO THAT THEIR CONCERNS WILL BE FULLY CO-ORDINATED, + HE SAID.

SIR JOHN ALSO COMPLIMENTED THE ELECTED BANKING MEMBER WHOM HE SAID HAD MADE HELPFUL COMMENTS ON THE USE OF THE EXCHANGE FUND.

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