Hong Kong apparently slowed down and as interest rates in
major overseas economies fell. Thus, the one-month Hong Kong
dollar interbank rate fell over the three months from 14% to
10 7/16% while the three-month rate eased from 14 1/8% to
10 7/16%. The decline was, however, not continuous. Rates
rose in early September, but then eased to less than 8% for
one-month and below 9% for 3-months, before hardening at the
end of September when the exchange rate of the Hong Kong dollar came under pressure. The best lending rate charged by the note-issuing banks was reduced in three stages from 15% at
the end of June to 12% at the end of September, and the maximum deposit rates offered by members of the Hong Kong
Association of Banks were similarly lowered from 9% on savings
accounts and from up to 11 1/2 % for certain other types deposit, to 6% and 9% respectively.
The foreign exchange market
3.10
This represented
of
a
Despite a worldwide strengthening of the US dollar,
the trade weighted exchange rate index for the Hong Kong dollar remained reasonably steady for most of the quarter, probably helped by the narrowing of the visible trade gap; but it weakened towards the end of September, reaching 86.9 as
against 89.7 at the end of June.
depreciation of 3.1% over the three months. Over the same
period, the import-weighted exchange rate index fell by 2.3%,
while the export-weighted index fell by 4.1%. Meanwhile, reflecting in particular the strength of the US currency, the Hong Kong dollar depreciated by 5.0% against the US dollar,
moving from $5.913=US$1 at the end of June to $6.285 at the end of September.
3.11
the
During the nine months ending September, however, the overall exchange value of the Hong Kong dollar as measured by trade weighted exchange rate index strengthened by 1.2%. import-weighted index strengthened by 3.8% while the export-weighted index declined by 2.1%.
The
16
/ 3.12 The
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