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growth of foreign currency deposits in 1983. Three seem particularly relevant, though there are others. Firstly, as I have said, the interest rate differential has generally been in favour of US dollar deposits. Secondly, a large part of tne increase in foreign currency deposits appears to have represented swap deposits, which have no effect on the exchange rate and should for analytical purposes be regarded at Hong Kong dollar deposits. And, thirdly, at foreign currency deposits aze reported in their Hong Kong dollar equivalents, part of the increases in foreign currency deposits reflects the valuation effect of a
valuation effect of a weaker Hong Kong dollar. These various developments make it more than usually difficult to interpret underlying monetary developments, but the growth of the money supply and of credit as evidenced by
statistics for loans and advances
down.
8.
-
-
has markedly slowed
In this pause 'we are continuing to discuss possible new measures to improve our control of the money supply. The difficulties remain considerable, and discussion cannot yet be taken to mean that a quick conclusion is in hand. I can say nu more at present.
9.
The last six months were a time of consolidation for
the monetary sector. The two-year transitional period for the establishment of the three-tier structure for deposit-taking institutions came to an end. The problems experienced in the registered deposit-taking companies sector at the beginning of the year, leading to the revocation of several registrations by the Commissioner of Deposit-taking Companies, appear
to have subsided. I believe that the
I believe that the three-tier structure gives better projection for depositors and a sounder monetary system. The maintenance of a
a stable and credible framework with proper legislative discipline 18 important to the continued development of Hong Kong as a major international
financial centre.
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