TNAG-2467-FCO40-3591-Economic-situation-in-Hong-Kong-1992 — Page 136

7.

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In the first five months of 1992, domestic exports to China continued to surge, while those to the United States revived somewhat. On the other hand, domestic exports to Japan registered a slight decline, and those to Germany and the United Kingdom dropped sharply.

Labour market

8.

The seasonally adjusted unemployment rate in the three months ending May, at 2.5% (provisional), was the same as in the three months ending April, though 0.4 of a percentage point higher than in the preceding three months. The underemployment rate, at 2.3% (provisional) in the three months ending May, was only 0.1 of a percentage point higher than in the three months ending April, though 0.3 of a percentage point-higher than in the preceding three months. The earlier easing in the labour market has stabilised lately.

Prices

9.

From 9.5% in March, the year-on-year rate of increase in the CPI(A) moderated to 8.9% in April and further to 8.8% in May. The deceleration in May was mainly due to the prices of fresh vegetables, which showed a much slower year- on-year rate of increase.

Financial sector

10.

Local money market interest rates remained soft during June. At 3 314%, the 3-month interbank rate at end-June was only 1/16 of a percentage point higher than a month earlier. Meanwhile, the 3-month Eurodollar deposit rate declined by 5/32 of a percentage point to 3 27/32 at end-June. The differential between the two rates thus narrowed to 3/32 of a percentage point in favour of the US dollar, form 5/16 of a percentage point at end-May.

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 June. At the end of the month, the savings, 3-month and 12-month deposit rates were 2%, 3 1/4% and 4 1/4% respectively. The best lending rate stood at 7%.

12.

The market exchange rate of the Hong Kong dollar moved within a narrow range from HK$7.731 per US$ to HK$7.742 per US$ during June. It closed the month at HK$7.732 per US$. Reflecting the recent softening of the US dollar, the effective exchange rate index declined from 111.4 at end-May to 110.2 at end-June.

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