XN000022-1986-08-15 — Page 2

FRIDAY, AUGUST 15, 1986

1.

FOSTERING STABLE BUSINESS ENVIRONMENT KEY ROLE

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THE GOVERNMENT'S ESSENTIAL ROLE IN THE ECONOMY IS TO FOSTER A STABLE BUSINESS ENVIRONMENT WITHIN WHICH PRIVATE ENTERPRISE CAN FLOURISH, THE FINANCIAL SECRETARY, MR PIERS JACOBS, SAID TODAY (FRIDAY).

+THAT ENVIRONMENT ALLOWS COMPETITION AND, INDEED, PROMOTES THE SPIRIT OF THE ENTREPRENEUR,+ MR JACOBS SAID AT THE SWEARING-IN CEREMONY OF THE 30TH TERM OF THE EXECUTIVE AND SUPERVISORY COMMITTEES OF THE CHINESE GOLD AND SILVER EXCHANGE SOCIETY.

MR JACOBS SAID THAT IN ANY FINANCIAL MARKET, SELF-REGULATION COULD STRENGTHEN THE INSTITUTIONS.

+YOUR SOCIETY SETS A GOOD EXAMPLE OF HOW THIS CAN AND SHOULD BE DONE, + HE SAID.

MR JACOBS SAID THAT HE HAD ALWAYS BEEN IMPRESSED BY THE SOCIETY'S STRONG TRADITIONS, ITS SELF-DISCIPLINE AND INTEGRITY AND THE CONSEQUENT AND EFFECTIVE SELF-REGULATION WHICH HAD GUIDED IT.

THE RESPECT THE SOCIETY HAD EARNED FROM THE LOCAL AND INTERNATIONAL BUSINESS COMMUNITY WAS WELL DESERVED.

+OUR MUTUAL GOAL IS TO MAINTAIN AND ENHANCE HONG KONG'S STATUS AS A LEADING FINANCIAL CENTRE. I AM SURE WE CAN ACHIEVE THIS THROUGH THE PARTNERSHIP BETWEEN THE GOVERNMENT AND THE PRIVATE SECTOR THAT HAS SERVED US SO WELL, HE ADDED.

FULL SUPPORT FOR INTEREST RATE CUTS

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THE FINANCIAL SECRETARY SAID TODAY THAT THE GOVERNMENT FULLY SUPPORTS THE REDUCTION IN INTEREST RATES DECIDED BY THE HONG KONG ASSOCIATION OF BANKS. THIS MEASURE IS IN RESPONSE TO CAPITAL INFLOWS FUELLED LARGELY BY SPECULATION ON THE HONG KONG DOLLAR.

THE FINANCIAL SECRETARY IN COMMENTING UPON RUMOURS, REITERATED THAT THE GOVERNMENT HAD ABSOLUTELY NO INTENTION OF DEPARTING FROM THE PRESENT LINKED RATE SYSTEM WHEREBY THE HONG KONG DOLLAR IS PEGGED AT A RATE OF 7.80 AGAINST THE U.S. DOLLAR.

HE ADDED, WE HAVE NOT RECEIVED, AND DO NOT EXPECT TO RECEIVE, REQUESTS FROM ANY OTHER GOVERNMENT FÖR TALKS RELATING TO OUR CURRENCY. THE RUMOURS ARE TOTALLY GROUNDLESS.+

+UNDER OUR