TNAG-2467-FCO40-3591-Economic-situation-in-Hong-Kong-1992 — Page 141

Manufacturing industry produces HK$322b

The gross output of the local manufacturing industry in 1990 was estimated to be HK$322,2 billion (US$41.3 billion), representing a slight decrease of one per cent in money terms over 1989, according to summary statistics compiled by the Census and Statistics Department. The industry's value added nevertheless grew by three per cent from HK$89.6 billion (US$11.5 billion) in 1989 to HK$92.2 billion (US$11.8 billion) in 1990. About 51,800 manufacturing establishments employing 762,600 workers were in operation during the year. Gross surplus of the local manufacturers was estimated to be HK$33 billion (US$4.2 billion), an increase of four per cent in money terms over 1989.

HK borrowings ahead

Hong Kong companies borrowed US$10.8 billion (HK$84.2 billion) from banks in developed countries during the second half of 1991, according to figures published by the Swiss-based Bank for International Settlement (BIS). The figures show that new loans to companies were the biggest factor behind the US$21.5 billion (HK$167.7 billion) increase in total debts to banks in Western Europe, North America and Japan owed by Hong Kong's banking, commercial and public sectors. The total owed is now US$157.2 billion (HK$1,226 billion).

OCB endorses Basle Committee recommendations

The Office of the Commissioner of Banking (OCB) fully endorses the minimum standards for the supervision of international banking groups and their cross-border establishments recommended by the Basle Committee on Banking Supervision.

Interest rate drop

Interest rates in Hong Kong dropped by 0.5 per cent on July 6 to just 1.5 per cent on general savings accounts. The revised interest rates on savings range from 1.50 per cent to 3.75 per cent for money invested for 12 months. The move was announced by the Hong Kong Association of Banks in response to the low level of interest rates in the United States and the strength of the Hong Kong currency against the peg with the US$.

Both the Hongkong and Shanghai Banking Corporation and the Standard Chartered Bank announced that their best lending rate would also be cut by 0.5 per cent to 6.5 per cent.

LAF rate cut

The Office of the Exchange Fund has cut the bid and offer rates of its liquidity adjustment facility (LAF), Hong Kong's version of a discount window, by 0.5 per cent to two per cent and four per cent respectively. The move followed closely the half percentage point cut in the U.S. discount rate by the Federal Reserve Bank from 3.5 per cent to three per cent. This was the first change in the LAF rates since its establishment on June 8 this year.

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