6.6
The best lending
rate, which can be taken as an
indicator of the price of financial capital, remained
unchanged at 16% until 31st May 1982 when it was adjusted
downwards to 15%. Though substantially lower than the high
level of 20% prevailing in October 1981, it is still high by
historical standards. Movements in local interest rates
reflect partly the interaction between the supply of financial
capital and the demand for it in the local money market. Also
important is the influence of the interest rates prevailing in
the world's major money markets, particularly those in the
United States.
6.7
As regards the price of fixed capital (other than
property), the unit value indexes of imports of capital goods
provide an
an indication of movements in the prices of plant and
machinery used in Hong Kong. The indexes available up to May
1982 suggest that the prices of imports of capital goods were
20% higher in the first half of 1982 than in the first half of 1981. This comparison conceals a significant deceleration in
the rate of increase in recent months. For instance, the
prices of imports of capital goods declined by 1% during the
six months ending May 1982, while they increased by 17% during
the previous six months.
Output prices
6.8
The unit value indexes of domestic exports provide an
indication of movements in the prices of manufacturing
output. In May this year, the prices of domestic exports were 8% higher than in May 1981. This is roughly in line with the rate of increase in the prices of imports of raw materials and
semi-manufactures but significantly less than the rate of
increase of 16% in money wage rates during approximately the same period. The discrepancy suggests that there have been a squeeze on profit margins and an increase in productivity.
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/6.9 Movements
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