XN000022-1992-06-03 — Page 13

WEDNESDAY, JUNE 3, 1992

11

MATURE DEBT MARKET HELPS RAISE PAD FUNDING

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A MATURE AND WELL-DEVELOPED DEBT MARKET WILL FACILITATE FUND RAISING ACTIVITIES, INCLUDING THOSE FOR THE PORT AND AIRPORT

MONETARY DEVELOPMENT PROJECTS, THE SECRETARY FOR

AFFAIRS, MR DAVID

NENDICK, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

IN A WRITTEN REPLY TO A QUESTION BY THE HON DAVID LI, MR NENDICK ALSO SAID WITH THE BONDS DENOMINATED IN THE LOCAL CURRENCY BANK'S ISSUE OF AND MATURING WELL PAST 1997, THE ASIAN DEVELOPMENT

DOLLAR BONDS HERE SEVEN-YEAR HONG KONG

IN APRIL WAS A VOTE OF CONFIDENCE IN HONG KONG'S FUTURE AND ITS CURRENCY.

**

-

*THE VERY ENTHUSIASTIC RESPONSE FROM THE MARKET INDICATES A SUBSTANTIAL DEMAND FOR FIRST-CLASS HONG KONG DOLLAR PAPER.

"THE ISSUE ALSO HELPS TO PROVIDE A BENCHMARK FOR MEDIUM-TERM MONEY IN HONG KONG," MR NENDICK SAID.

THE SECRETARY SAID THE ADB ISSUE SHOULD PROVIDE A USEFUL GUIDE

WHEN CONSIDERING FOR OTHER BORROWERS

THEIR FUNDING NEEDS IN THE

MARKET.

HONG KONG

BY SUCH THE

MR NENDICK SAID BOND ISSUES LAUNCHED IN PRESTIGIOUS MULTILATERAL ORGANISATIONS WITH TOP CREDIT RATINGS,

SIGNIFICANT

ΤΟ BENEFITS AS THE ASIAN DEVELOPMENT BANK, BROUGHT DEVELOPMENT OF HONG KONG'S CAPITAL MARKETS.

SHOULD THE ADB WISH TO MAKE ANY FURTHER ISSUES HERE IT WOULD CONSULT THE ADMINISTRATION WITH RESPECT TO AN APPROPRIATE TIMING, SO AS TO ENSURE THERE WAS NO CLASH WITH THE PLANS OF OTHER PROSPECTIVE ISSUERS.

LIVI

INTEREST RATE HAS LITTLE DIRECT EFFECT ON COST OF LIVING

*

**

THE LEVEL OF INTEREST RATES SHOULD HAVE LITTLE DIRECT EFFECT ON THE COST OF LIVING IN GENERAL BECAUSE THE GREAT MAJORITY OF EXPENDITURE ITEMS COVERED BY THE CONSUMER PRICE INDEX ARE NOT SENSITIVE TO INTEREST RATE MOVEMENTS.

THIS WAS STATED BY THE SECRETARY FOR MONETARY AFFAIRS, MR DAVID NENDICK, IN A REPLY TO A QUESTION BY DR THE HON CONRAD LAM IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

HE SAID IT WAS ARGUABLE THAT NEGATIVE REAL INTEREST RATE MIGHT AFFECT INVESTMENT DECISIONS, THEREBY LEADING TO INVESTMENT OR OVER- INVESTMENT IN CERTAIN ECONOMIC SECTORS SUCH AS THE PROPERTY SECTOR.

IN ORDER