2
2
3.
In the
predecessors, I shall
tradition
established by my
this evening be reviewing the
Budget forecast for the economy in detail, but before
then I would like to discuss some other factors of
importance to the future of our economy.
4.
Despite the volatility in foreign exchange.
markets, the overall international value of the Hong
Kong dollar has been relatively stable. In the first
eight months of the year, the US dollar has
depreciated by 23% against the yen and 17% against the
deutschemark, but the trade-weighted exchange rate
index of the Hong Kong dollar declined
dollar declined by only 9%
during this period.
5.
The depreciation of the Hong Kong dollar
against the major non-US dollar currencies has been of
considerable benefit to
in our
competitiveness
our exporters. The increase
has been obtained without
creating undue pressure on our domestic inflation.
These are happy results of the linked exchange rate
system. But even more welcome is that, despite some
recent unwise and uninformed speculation that the
linked rate was going to be altered, people now accept
that the linked rate system is here to stay. And for
/the record
*
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