TNAG-0735-FCO40-939-Policy-objective-for-the-developing-of-Hong-Kong-in-the-1980-1978 — Page 121

between interest rates in Hong Kong and overseas (15) increases

the net inflow of funds for example, by dissuading exporters from retaining their earnings overseas and borrowing relatively cheaply in Hong Kong to meet their Hong Kong dollar liabilities, by discouraging Hong Kong residents from placing their funds

overseas and by encouraging foreign banks to be less dependent

on the inter-bank market - the exchange value of the Hong Kong dollar should be strengthened. Although an increase in the net inflow of funds may have a perverse effect on the growth of the money supply, the offsetting influence of higher interest rates

on the demand for loans should not be overlooked.

(15)

Euro-dollar

time deposits

28. 1.78

7 7/16

Interest rates on 3-month deposits:

deposits(*)

HK dollar certificates

of deposits

4 7/8

HK dollar time

1 3/4

•

4. 3.78

7 1/4

1 3/4

5

1. 4.78

7 7/16

1 3/4

5 1/8

29.4.78

7 5/8

1 3/4

4 5/8

27. 5.78

8 1/16

2 1/4

5 1/8

1. 7.78

8 5/8

2 1/4

5 1/2

29. 7.78

8 7/16

2 1/2

5 5/8

26. 8.78

8 1/2

2 1/2

5 1/2

2. 9.78

8 7/8

2 1/2

5 5/8

30.9.78

9 7/16

2 1/2

6 5/8

28.10.78

10 3/4

2 1/2

7

4.11.78

11 3/8

3 1/2

7 1/4

9.11.78

11 13/16

4 1/2

8 1/4

Note: (*) Rate paid by principal banks

17

/(a)

Control