Mur Stone Thank you
pa.
Ра
(To note
Mar Porter's Comments
23/16ل
HUB 090/1
FROM: M V Stone
Hong Kong Department
DATE: 17 June 1992
cc: PS/Mr Goodlad
Mr Hum
Mr Broadbent,
Economic Advisers
Mr Ricketts
PS/Mr Patten
HONG KONG: THE LINKED EXCHANGE RATE SYSTEM
A HhB 10 246
1. On a copy of my submission of 12 May on senior Treasury impressions of Hong Kong, Mr Patten said that he would be
grateful for a note explaining the linked exchange rate, its
history and its practice.
2.
I now attach a note, which has been cleared with Economic Advisers, which sets the position out briefly.
Nihil v Stare.
M V Stone
при
V.u
seful
21
6
ta
и
The clearest exposition I have of the theory tehind the link is in He
attached paper whid we gave the Chinese in 1987 fie tefore the Accounting Arrangements) The link works because the markets have come to believe
in its permanence. If it was once changed (eg to help He fight against inflation) Hat Certainty would be lost, and the markets would be more likely to speculate à anticipatio of hither changes if the political going sol rough.
MVSAGP/1
SLM
a revaluation
Paluth
13/1
اتها
No comments yet.
Private notes are available after approval.