TNAG-2473-FCO40-3600-Asian-Development-Bank-liabilities-of-Hong-Kong-1992 — Page 108

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Maits 102

Pozlı

ре

ADR.

112467

MDLIAN 4071

12

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FM ODA

TO ROUTINE HONG KONG

TELNO 1442

OF 13122OZ FEBRUARY 92

INFO ROUTINE PEKING, MANILA, FCO, HM TREASURY

Andol

HMT FOR MANUEL.

MANIL FOR UK EXECUTIVE DIRECTOR, ASIAN DEVELOPMENT BANK

FROM MRS. JENNIFER RADICE, INTERNATIONAL FINANCIAL INSTITUTIONS DEPARTMENT, ODA. V708.

YOUR TELNO. MODEV 1:- LIABILITIES OF HONG KONG TO ASIAN DEVELOPMENT BANK.

1. WE HAVE BEEN INFORMED BY TREASURER'S DEPARTMENT OF ASIAN DEVELOPMENT BANK THAT ALTHOUGH THE NUMBER OF HONG KONG'S CALLABLE SHARES IS CORRECTLY STATED IN YOUR TUR AS 8478, THE FIGURE OF US.DLRS. 95.99 MILLION DOES NOT (NOT) REFLECT THE PRESENT LIABILITIES OF HONG KONG BECAUSE OF CHANGES IN THE US.DLRS./SDR. EXCHANGE RATE. THE CORRECT FIGURE FOR HONG KONG'S CALLABLE CPITAL AS AT 31 DECEMBER 1991 IS USDLRS. 121.27 MILLION ON THE BASIS OF EXCHANGE RATE US.DLRS./SDR. OF 1.43043.

2. THE BANK HAVE CALCULATED THAT HONG KONG'S OUTSTANDING LIABILITIES FOR ADF IV AMOUNT TO US.DLRS. 344,000 AND FOR ADF V., US.DLRS. 1 MILLION. THESE FIGURES ARE ALMOST IDENTICAL TO THOSE IN (C) OF YOUR TUR.

3. IN ADDITION THE ASDB HAVE DRAWN OUR ATTENTION TO ANOTHER POSSIBLE LIABILITY OF HONG KONG TO THE BANK, NAMELY HONG KONG'S MAINTENANCE OF VALUE (MOV) OBLIGATION ARISING FROM THE BANK'S HOLDINGS OF HONG KONG DOLLARS. AS OF 31 DECEMBER 1991, THIS OBLIGATION IS NOTIONALLY COMPUTED TO BE ABOUT HONG KONG DOLLARS 59.5 MILLION (US.DLRS. 7.762M. AT CURRENT RATE OF EXCHANGE). THE OBLIGATION RESULTS FROM CHANGES IN THE EXCHANGE RATE OF THE HONG KONG DOLLAR SINCE 1978 WHEN THE PROVISIONAL ARRANGEMENTS RELATING TO VALUATION OF THE BANK'S CAPITAL AND MOV CAME INTO OPERATION PENDING SELECTION OF THE APPROPRIATE SUCCESSOR TO THE 1966 DOLLAR FOR VALUING THE BANK'S CAPITAL STOCK. UNDER THE PROVISIONAL ARRANGEMENTS, SETTLEMENT OF MOV OBLIGATIONS HAS BEEN HELD IN ABEYANCE.

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