TNAG-1171-FCO40-1452-Future-of-Hong-Kong-1982 — Page 113

CONFIDENT

M23

As you can see from the following figures, no money has left the Hong Kong monetary sector over the last 12 months.

F.S.

'Tis

dew hir thew or all.

Net open foreign exchange position (i.e. net foreign currency assets, spot and forward) of banks and dtc's

31.12.1980

31.12.1981

Increase

HK$16.6 bn

HK$19.6 bn

HK$3 bn

If the Exchange Fund's foreign currency position is also taken into account, then the Hong Kong position is even better. Over the 12 months ending 31.12.1981 the E.F.'s foreign currency assets increased by about $6 billion (of which $2.5 bn was switched out of HK$: the balance was net foreign currency income and receipts). It follows that taken together the monetary sector and the Exchange Fund's foreign currency assets over the 12 months ended 31.12.1981 increased by $9 billion or by 22%. This calculation does not represent a balance of payments inflow, because it takes no account of changes in the net foreign currency position of Hong Kong residents, including individuals and commercial and industrial companies. This does not suggest that there has been a significant outflow. However, it should be pointed out that a part of the increase results from a fall in the exchange value of the Hong Kong dollar. Over the year the effective index fell from 88.2 to 85.9 or by 2.6%.

2.

As you can see from the following figures, the net open foreign exchange position of the banks and dtc's fell in January and February, but this could partly be accounted for by seasonal factors (CNY) and also as a result of a slight improvement in the exchange value of the HK$.

December 1981

January 1982

February 1982

HKD19.6 billion

HKD19.4 billion

HKD17.8 billion

This represents a fall of $1.8 bn between the end of December and end of February. We do not have the E.F. figures for these months, but in January and February, the Fund switched $1.1 bn into foreign exchange, thus offsetting a large part of the decline in the net open foreign exchange position of the banks and dtc's.

CONFRUTEL

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