XN000022-1993-12-15 — Page 47

WEDNESDAY, DECEMBER 15, 1993

THE

32

BANKNOTES ISSUE FULLY BACKED BY EXCHANGE FUND

* * *

CIRCULATION OF HONG KONG DOLLAR BANKNOTES OUTSIDE THE TERRITORY DOES NOT POSE A PROBLEM TO ITS MONETARY SYSTEM, THE ACTING SECRETARY FOR FINANCIAL SERVICES, MR TAM WING-PONG, SAID TODAY (WEDNESDAY).

IN A WRITTEN REPLY TO A QUESTION BY DR THE HON DAVID K P THE LEGISLATIVE COUNCIL, MR TAM SAID THE ISSUE OF BANKNOTES WAS BACKED BY U.S. DOLLARS PLACED WITH THE EXCHANGE FUND.

LI IN

FULLY

AMOUNT

HE SAID EVEN IN THE HIGHLY UNLIKELY EVENT THAT A LARGE OF BANKNOTES WAS RETURNED TO HONG KONG, THE EXCHANGE FUND WOULD NOT HAVE ANY PROBLEM IN COMING UP WITH THE U.S. DOLLARS FOR REDEEMING THE BANKNOTES.

THERE IS ALSO A SUBSTANTIAL AMOUNT OF OFFSHORE HONG KONG DOLLAR DEPOSITS, MAINLY HELD BY MAINLAND ENTERPRISES OR INDIVIDUALS AND PLACED WITH BANKS IN CHINA.

AT THE END OF SEPTEMBER THIS YEAR, THE BANKING SECTOR'S GROSS HONG KONG DOLLAR LIABILITIES TO BANKS IN CHINA AMOUNTED TO $81 BILLION, BEING 60 PER CENT OF THE TOTAL HONG KONG DOLLAR LIABILITIES TO BANKS ABROAD.

THE NET AMOUNT OF HONG KONG DOLLAR LIABILITIES TO BANKS IN CHINA AMOUNTED TO $44 BILLION AT THE END OF THE SAME MONTH.

MR TAM SAID A SUDDEN AND SUBSTANTIAL MOVEMENT OF THESE HONG KONG DOLLAR HOLDINGS COULD HAVE AN IMPACT ON THE HONG KONG DOLLAR EXCHANGE RATE AND THE LIQUIDITY POSITION OF INDIVIDUAL BANKS IN HONG KONG.

BUT THIS WAS UNLIKELY TO BE SIGNIFICANT, HE ADDED.

THE

"THE HONG KONG MONETARY AUTHORITY KEEPS A CLOSE WATCH ON CHANGE IN THESE OFFSHORE DEPOSITS, INCLUDING LIAISING WITH THE PEOPLE'S BANK OF CHINA AND CONDUCTING SURVEYS FOR THIS PURPOSE, HE SAID.

"

NEW MRF FORMAT FOR UPCOMING BUDGET

* *

BASIS ON

THAT THE

EVERY EFFORT WILL BE MADE TO REVIEW AND UPDATE THE WHICH THE MEDIUM RANGE FORECAST (MRF) IS MADE TO ENSURE FORECAST OF BOTH REVENUE AND EXPENDITURE IS AS REALISTIC AS POSSIBLE.

THE

THIS WAS STATED BY THE SECRETARY FOR THE TREASURY, MR DONALD TSANG, IN A WRITTEN REPLY TO A QUESTION BY THE HON PETER WONG IN LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

/MR TSANG