SECTION VII: MONETARY SYSTEM
CONFIDENTIAL
FREE EXCHANGE OF FOREIGN CURRENCY TO CONTINUE?
66. Yes. Agreement provides that no exchange control policy will
be applied in the SAR.
CURRENCY TO BE ISSUED BY THE TWO BANKS AS NOW?
67. Authority to continue to issue Hong Kong currency will be
vested in the government of the SAR which may authorise designated
banks to issue or to continue to issue Hong Kong currency under
statutory authority.
HOW WILL SAR SATISFY ITSELF THAT ISSUE OF CURRENCY IS SOUNDLY BASED
AND "CONSISTENT WITH THE OBJECT OF MAINTAINING THE STABILITY OF THE
CURRENCY"?
68. This is for the SAR to decide. The current system involves a
link between the issuing of bank notes and the US dollar. Under the autonomy envisaged for the SAR, its Government would have the freedom to operate a system on these lines.
WILL HONG KONG RETAIN ITS OWN CURRENCY?
69. Yes. The Hong Kong dollar, as the legal tender of Hong Kong,
will continue to circulate freely and remain fully covertible.
CONFIDENTIAL
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