TNAG-2475-FCO40-3605-Hong-Kong-exchange-fund-report-and-accounts-for-1991-1992 — Page 79

15-JUL-1992 16:08

DEF HKG

852 865 3346 P.04

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These are the reasons for my decision. And now I would like to explain the position of the Fund at the end of 1991. The balance sheet will show that at 31 December 1991 the Exchange Fund stood at HK$236 billion. I would like to highlight two particular figures. The first is that the accumulated earnings of the Fund' amount to HK$99 billion. The second is that the total foreign currency assets in the Fund amount to US$29 billion.

9. I think Members will agree that these are very substantial figures. Let me put the foreign currency figure in particular into its proper perspective. At about US$29 billion, our foreign currency holdings are the 12th highest in the world, even though on a GDP basis Hong Kong would be ranked only 34th. Another way of putting it is to compare this figure with those of other economies on a per capita basis. Our per capita foreign currency holdings stand at US$5,000. This compares with an average for the OECD countries of only US$740.

10. The Fund's accumulated earnings of HK$99 billion should not be confused with the fiscal reserves which were approximately $76 billion at 31 December 1991. It is only the fiscal reserves that are available to be drawn upon, prudently, to meet public expenditure requirements. The Fund's role is to safeguard our exchange rate stability.

/11. Nor should ...