TNAG-2475-FCO40-3605-Hong-Kong-exchange-fund-report-and-accounts-for-1991-1992 — Page 21

CONFIDENTIAL

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23.

Performing its role as the lender of last resort, the

Fund provided late overnight assistance on 15 occasions in 1991,

with the amount varying from $50 million to $450 million. During

the short-lived bank runs in July and August, the Fund provided

liquidity support to the banks affected also in the form of

standby credit facility and deposit placement.

THE EXCHANGE FUND BILLS PROGRAMME

24.

The Exchange Fund Bills Programme was introduced in

March 1990 with the issue of 91-day Bills. These Bills are

tendered for weekly on Tuesdays. In total, 52 issues were

arranged in 1991. Tenders for the Bills were oversubscribed at an

average rate of 2.62 times and the Bills were issued at an average

margin of 57 basis points below 3-month HIBOR during the year.

The issue size was raised from $400 million to $500 million on 14

August 1991 and remained at this level for the rest of the year.

25.

The 182-day Bills, which were introduced on 31 October

1990, are issued at fortnightly intervals with an issue size of

$200 million. 26 issues were arranged in 1991. Tenders for the

Bills were oversubscribed at an average rate of 3.24 times and the

Bills were issued at an average margin of 62 basis points below

6-month HIBOR. The issue size was maintained at $200 million

throughout the year.

26.

As both the 91-day and 182-day Bills were well received

by the market, the Programme was further extended on 27 February

1991 to include the issue of 364-day Bills. Tenders for these

Bills are held once every four weeks. 11 issues were arranged in

1991. Tenders for the Bills were oversubscribed at an average

rate of 2.87 times and the Bills were issued at an average margin

of 76 basis points below 1-year HIBOR. Since inception, the issue

size has been maintained at $200 million.

CONFIDENTIAL