TNAG-2475-FCO40-3605-Hong-Kong-exchange-fund-report-and-accounts-for-1991-1992 — Page 61

CONFIDENTIAL

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EXCHANGE FUND INVESTMENT POLICY

APPENDIX I

The investment policy is set out below. A list of exceptions to the policy, endorsed by the Exchange Fund Advisory

Committee, is at page 53.

Objectives

1. The main objectives are as follows:

(a)

Distribution

of assets

to maintain sufficient liquidity to provide

adequate cash for the redemption of

certificates of indebtedness and placement

receipts and to provide funds for regulating the exchange value of the Hong Kong dollar;

(b)

to

obtain the

maximum

investment return

.(c)

available and to provide concomitant

investment safety;

to safeguard the Hong Kong dollar value of the

Fund's foreign currency assets.

2. As a general guideline, the currency spread

of assets not

denominated

in Hong Kong dollars

should be:-

US dollars

Gold

40 - 100%

2-1/2%

Other currencies

balance

CONFIDENTIAL