TNAG-1652-FCO40-2300-Hong-Kong-Exchange-Fund-Ordinance-1987 — Page 16

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AND SOMETIMES POSITIVELY BRINGS ABOUT, THE NECESSARY MONETARY ADJUSTMENTS. THE TEMPORARY BORROWINGS INVOLVED IN SUCH INTERVENTION ACTION CAN AT TIMES BE SUBSTANTIAL.

5. BECAUSE OF THE RAPID BUILD UP OF FISCAL RESERVES IN RECENT MONTHS AND THE NEED TO INTERVENE RECENTLY, THROUGH BORROWING HONG KONG DOLLARS TO BUY US DOLLARS, TO PREVENT THE HONG KONG DOLLAR FROM STRENGTHENING TOO SHARPLY AWAY FROM 7.80, TOTAL BORROWINGS BY THE EXCHANGE FUND NOW EXCEED HK DOLLARS 29,000 MILLION. I SHOULD BE GRATEFUL IF I COULD RECEIVE AS SOON AS POSSIBLE THE SECRETARY OF STATE'S APPROVAL TO INTRODUCE A RESOLUTION IN THE LEGISLATIVE COUNCIL FOR INCREASING THE LIMIT TO HK DOLLARS 50,000 MILLION. PROPOSE TO INTRODUCE THIS RESOLUTION AS PART OF THE BUDGET EXERCISE ON 25 FEBRUARY, AND THERE MAY BE A NEED FOR EARLIER ACTION.

AKERS-JONES

t

YYYY

HMLNAN 7757

LIMITED

MKD

ECONOMIC ADVISER

LEGAL ADVISERS

MR

GILLMORE

COPIES TO

MR FIFOOT, LEGAL

ME ITENT

ADVISERS

валж

OF ENGLAND

MR KELLY, TREASURY

SIR

D WILSON

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