XN000022-1988-07-15 — Page 10

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FRIDAY, JULY 15, 1988

14. THE UNDERTAKING BY HSBC TO MAINTAIN A BALANCE ON THE ACCOUNT NO LESS THAN THE NCB OF THE REST OF THE BANKING SYSTEM MEANS THAT IT WILL HAVE IN EFFECT CREATED FOR ITSELF A CLEARING ACCOUNT. THUS, WHEN HSBC PURCHASES FOR ITS CUSTOMERS US DOLLARS WITH HONG KONG DOLLARS, NCB WILL INCREASE. SO THAT THIS WILL NOT RESULT IN THE BALANCE FALLING SHORT OF NCB, IT WILL BE IN THE INTEREST OF HSBC TO FUND THE US DOLLAR PURCHASE BY BORROWING HONG KONG DOLLARS IN THE INTERBANK MARKET, IN A MANNER IDENTICAL TO THAT IN WHICH ANY OTHER LICENSED BANK WOULD CURRENTLY ACT. IN DOING SO, THE SUPPLY OF HONG KONG DOLLARS IN THE INTERBANK MARKET WILL NOT BE AFFECTED.

MARKET INFORMATION

16.

IT WILL

GIVEN THE MONETARY EFFECTS OF EXCHANGE FUND OPERATIONS UNDER THE NEW ACCOUNTING ARRANGEMENTS, BE USEFUL TO PARTICIPANTS IN THE FOREIGN EXCHANGE AND MONEY MARKETS TO HAVE ACCESS TO CERTAIN RELEVANT INFORMATION. ARRANGEMENTS ARE BEING MADE FOR THE EXCHANGE FUND TO PUBLISH AT APPROPRIATE TIMES ON EACH DAY THROUGH THE ELECTRONIC MEDIA THE BALANCE AT THE CLOSE OF THE PREVIOUS DAY AND THE NET EFFECT OF OPERATIONS CARRIED OUT BY THE EXCHANGE FUND DURING THE DAY ON THE BALANCE. IT IS HOPED THAT SUCH INFORMATION WILL START TO BE MADE AVAILABLE IN EARLY SEPTEMBER. WHEN CONSIDERED APPROPRIATE, OTHER INFORMATION WILL ALSO BE SO PUBLISHED.

16.

ANY REQUEST FOR CLARIFICATION OF THE MATTERS DESCRIBED IN THIS PAPER SHOULD BE ADDRESSED TO THE DEPUTY SECRETARY FOR MONETARY AFFAIRS WHO IS IN CHARGE OF THE OPERATION OF THE ACCOUNT. HE CAN BE REACHED AT 5-290021.

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