Page
O
3.
It is probable that most transactions (apart from remittances) are with Hong Kong residents; earnings originating elsewhere are probably received in other foreign currencies but we cannot be sure. It is quite possible that, say, a Filipino importer of Chinese goods will pay in HK dollars in Hong Kong. Thus it is not even necessarily true to say that the total figure of conversions represents Hong Kong's overall balance of payment position with China.
4.
Foreign currency purchases ran at a level some 20% up on the previous year for the first 10 months of 1977 and 'then accelerated sharply in the last 2 months and in January this year.
During these three months foreign currency purchases were running at a level more than double the average for the previous 10 months. I have no explanation to offer for this rapid increase but it seems unlikely that it reflects transactions in the first 5 categories mentioned in paragraph 2. It is perhaps more likely that the Chinese, either have a pressing need for the foreign exchange and are therefore running down Hong Kong dollar balances or are taking a view about future exchange rates.
5.
Purchases of US dollars continued to predominate although in some months there were not insubstantial purchases of sterling and in the last 2 months of the year large purchases were made of other currencies. I attach a table giving monthly figures.
(P.C. Hayward) DS (MA) 3.3.78
No comments yet.
Private notes are available after approval.