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of retained imports (ie imports less exports).
10. The Fund's intervention in the exchange markets has
in the past been aimed at moderating disorderly fluctuations
round the perceived trend leaving the trend in the rate to
be determined by market forces. In the event of a major
crisis, it might be expected to react by more substantial
intervention or even more radical measures. Should its
resources be insufficient, the Hong Kong Government has powers
to borrow abroad, on the security of the general
revenue of the colony, for the account of the Fund. In
normal circumstances, the Hong Kong Government, with
minimal external debt and a substantial fiscal surplus,
would be regarded as a prime borrower. However, should its
borrowing capacity be impaired by political and economic
uncertainty, it would have to apply to HMG for guarantees
on its borrowing. The Bank of China is almost certainly
the largest buyer of foreign currency in Hong Kong for, in
China's eyes, that is the purpose Hong Kong serves.
It could,
therefore, temporarily lessen the impact on the foreign
exchange market by holding back from buying foreign
currency and even selling into the market. But it is most
unlikely that the Bank could hold back, or intervene, for
very long.
Relationship with International Financial Organisations
11. Hong Kong is not a member of the IMF or IBRD (World
/Bank
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