TNAG-1729-FCO40-2442-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1988 — Page 220

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Supplementary to Question No.

in Lego Meeting op 27.4.88

Mr. CLYDESDALE: Sir, before asking the supplementary

question, I would like to thank the Financial Secretary

for pointing out that interest is, of course, paid to

public funds for the use of our reserves by the Exchange

Fund, but a close scrutiny of my question will confirm

that I did not suggest otherwise. Risks often bring

rewards and I would like to ask if the

Exchange Fund has benefited from the assumption of the

exchange risks referred to by the Financial Secretary or

can the Government confirm that the interest credited

to general revenue for the use of our published reserves

reflects fully and fairly the overall return, including

that on exchange, achieved by the Exchange Fund on the

relevant underlying assets?

FINANCIAL SECRETARY:

Sir, risks bring.

rewards, of

course, but risks also bring certain dangers we could lose

a great deal of money. The

management of the

Exchange Fund itself is kept confidential

for a number of reasons that we believe to be entirely

valid. All I can say this afternoon, Sir, is that it has

benefited from taking certain risks. The full benefits

have not been passed on to general revenue. I think it

would not be appropriate that they should be passed on to

general revenue because they are benefits that arise from