XN000022-1996-05-22 — Page 40

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Reply:

(a)

(b)

There is no legislation in Hong Kong governing the use of Renminbi (RMB) or any foreign currency for payment of purchase. The concerned parties to a transaction may use and accept any currency agreed between them. This freedom for parties to transact in the currencies of their choice is common in most free market economies.

The exchange activities of RMB or any foreign currency at the retail level are governed by the Money Changers Ordinance which protects consumers from malpractices in the money changing trade. Under the Ordinance, a money changer is required to display the net rates of exchange and make out, for confirmation by a customer, a transaction note giving essential information in a prescribed form.

We do not prohibit the circulation or usage of the RMB in Hong Kong and the Sino-British Joint Declaration and the Basic Law of the Hong Kong Special Administrative Region (HKSAR) clearly state that the HKSAR government shall formulate monetary and financial policies on its own. The question of discussion with the Chinese government on the possibilities of the RMB becoming one of the currencies in circulation after 1997 does not arise.

We do not have any clear basis to estimate the extent of the circulation of RMB in Hong Kong now or after 1997. However, we believe that the amount is, and will remain, small compared with Hong Kong dollar in circulation.

End

Work shifts arrangement of CSD staff

Following is a question by the Hon Zachary Wong and a reply by the Secretary for Security, Mr Peter Lai, in the Legislative Council today (Wednesday):

Question:

It was reported that more than 10 Correctional Services Department (CSD) staff were taken hostage in the riot which broke out at the Whitehead Detention Centre on the tenth of this month. In this connection, will the Government inform this Council of:

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