G.F. 326
CONFIDENTIAL # &
6
downward pressure on the exchange value of the Hong Kong
dollar, in practice any downward pressure
to be significant because the switch in
their deposits does not necessarily
make a corresponding
institutions
to
currency of their lending.
seems unlikely
the currency of
induce financial
switch in the
12.
dollar
The differential between US dollar and Hong Kong
interest rates has been widening recently.
Although US dollar interest rates have been falling, Hong
Kong dollar rates have been falling even faster.
Earlier
interest rates
though playing
an
were causing
difficulties
to
this year high
anti-inflationary role
various sectors of our economy.
falls.
I recognise, however,
still high in both real and
Thus I welcome the recent
that interest rates are
nominal terms relative to
As three years.
their levels prior to the past two or
a
result and although the relief is welcome many individuals
and businesses are still under pressure.
13.
interest
The
property market
has rates
had a
is one area in which high
marked dampening effect on
of high rates, consequence a
a stagnant
new
activity. As
export performance and an abundant supply of land and
property on the market, prices and rentals have generally
been falling throughout this year,
signs of levelling off. This is arguably a satisfactory
though there
are
now
state of affairs from
view the point of
of potential
owners
or
tenants
of
property,
and it
contributes
to
CONFIDENTIAL #
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