XN000022-1993-12-10 — Page 8

FRIDAY, DECEMBER 10, 1993

KONG OTHER CORPORATIONS, SUCH AS THE MTRC, AS WELL AS THE HONG

WITH THE TWO CREDIT MONETARY AUTHORITY, ALSO HAD FREQUENT MEETINGS RATING AGENCIES, HE SAID.

GET THE RATING "I AM NOT UNHOPEFUL THAT IN DUE COURSE WE CAN

HE SAID. BACK TO A BETTER LEVEL. IT'S NOT BAD BUT IT COULD BE BETTER,

HE BELIEVED THAT MOODY'S ANNOUNCEMENT WOULD HAVE NO BIG ON OVERSEAS' VIEW OF HONG KONG,

IMPACT

0

—

A

MOODY'S ANNOUNCEMENT DISAPPOINTING AND SURPRISING

* * *

SAID

GOVERNMENT SPOKESMAN

TODAY

THAT HE (FRIDAY)

INVESTORS SERVICE DISAPPOINTED AT THE ANNOUNCEMENT OF MOODY'S DOWNGRADE THE LONG-TERM LOCAL CURRENCY RATING OF DEBTS ISSUED BY MASS TRANSIT RAILWAY CORPORATION (MTRC) WHICH WOULD AT THE SAME

LOCAL LONG-TERM APPLY

THE IMPLIED SOVEREIGN RATING ON DEBTS OF HONG KONG.

ΤΟ

"WE

GOVERNMENT

WAS

TO

THE

TIME

CURRENCY

FINANCIAL

FIND IT SURPRISING THAT WHILE ACKNOWLEDGING THE

AND THE LONGER-TERM ECONOMIC IT APPROPRIATE TO KONG, MOODY'S HAD CONSIDERED

THE CURRENCY RATINGS OF HONG KONG

MTRC,

STRENGTH OF THE HONG KONG PROSPECTS OF HONG DOWNGRADE THE LOCAL SPOKESMAN SAID.

AND

HE ADDED THAT THERE WAS NO REASON TO CONSIDER THAT THE CREDIT INCREASE RISK ATTACHED TO THE MTRC LOCAL CURRENCY DEBT ISSUES SHOULD GIVEN THE STRENGTH OF THE CORPORATION, AND THE DECISION WOULD NOT HAVE ANY IMMEDIATE OR SIGNIFICANT IMPACT ON MTRC.

THE

THE SPOKESMAN SAID THERE WAS LITTLE GROUND TO SUGGEST THAT HONG KONG DOLLAR WAS POTENTIALLY VULNERABLE TO POLITICAL UNCERTAINTIES BOTH IN HONG KONG AND CHINA.

HONG KONG HAS SINCE 1983 ADOPTED A LINKED EXCHANGE RATE UNDER WHICH THE HONG KONG DOLLAR IS FULLY BACKED BY THE U.S. DOLLAR.

SYSTEM

"THE LINK TO THE U.S. DOLLAR HAS ENSURED STABILITY OF THE VALUE OF THE HONG KONG DOLLAR. THE HONG KONG GOVERNMENT IS FULLY COMMITTED

CLEARLY SYSTEM WHICH HAS BEEN TO MAINTAINING THE OBJECTIVE OF OUR MONETARY POLICY.

"WE

ALSO

DEFINED AS

FOR

THE

THE

EXTREMELY STRONG BACKING HAVE

HONG KONG CURRENCY INCLUDING THE EXCHANGE FUND WHICH STOOD AT HK$287 BILLION AT

HE SAID. THE END OF 1992, AMONG THE LARGEST IN THE WORLD,

+

"I

REMARKABLY STABLE

AS A MATTER OF FACT, THE LINK HAS REMAINED SINCE ITS INTRODUCTION IN OCTOBER 1983, THE SPOKESMAN SAID.

IT

MAJOR

EXTERNAL

THE

JUNE

PROVED TO BE CAPABLE OF HAS

WITHSTANDING SHOCKS, FOR EXAMPLE, THE 1987 GLOBAL STOCK MARKET CRISIS, 1989 EVENT IN CHINA AND THE 1991 GULF WAR, HE SAID.

/HE ADDED