TNAG-2466-FCO40-3590-Economic-situation-in-Hong-Kong-1992 — Page 76

7.

In the first two months of 1992, the value of domestic exports to China registered a notable increase over a year earlier. The value of domestic exports to Germany and the United Kingdom, on the other hand, dropped sharply. Those to Singapore and Japan also showed some declines.

Labour market

8.

The seasonally adjusted unemployment rate in the three months ending February, at 2.0%, was 0.1 of a percentage point higher than in the preceding three months. The underemployment rate, at 1.9% in the three months ending February, was 0.3 of a percentage point higher.

Prices

9.

The year-on-year rate of increase in the CPI(A), at 10.4% in February, was slightly lower than the 10.5% in January. The rate of inflation in February was still affected by higher prices of fresh food items around the Lunar New Year. Nevertheless, it was already much lower than the peak of 13.9% recorded in April 1991.

Financial sector

10.

Local money market interest rates edged up further in March, due to share subscription activities. The 3-month interbank rate closed the month of March at 4 13/16%, 1/4 of a percentage point higher than a month earlier. Meanwhile, the 2-month Eurodollar deposit rate increased by only 1/16 of a percentage point to 4 1/4%. The differential between the two rates thus widened to 9/16 of a percentage point in favour of the Hong Kong dollar interest rate at end-March from 3/8 of a percentage point at end-February.

11.

The various deposit rates administered by the Hong Kong Association of Banks and the best lending rate charged by the two note issuing banks remained unchanged during March. At the end of March, the savings, 3-month and 12-month deposit rates were 3 1/2%, 4 3/4% and 5 3/4% respectively. The best lending rate stood at 8 1/2%.

12.

The exchange rate of the Hong Kong dollar against the US dollar remained stable in March, moving within a narrow range from the low of HK$7.757 per US$ to the high of HK$7.739 per US$, at which it closed the month. The overall exchange value of the Hong Kong dollar, in terms of the effective exchange rate index, rose from 111.6 at end-February to 112.5 at end-March.

13.

Boosted by favourable corporate results, the Heng Seng Index rose to a historical high of 5 071 on 13 March. At the end of March, the Hang Seng Index stood at 4 938, 9 points higher than a month earlier. Average daily turnover increased from $2.37 billion in February to $2.56 billion in March.

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