Development of the Exchange Fund:
Since July 1988, Hong Kong has been planning to issue Exchange Fund bills. 1989 65438+1On 5 October, Joseph Yam, Financial Secretary of the Hong Kong Government, first publicized this idea at a seminar of the Chinese General Chamber of Commerce. Early March. Mr. Jack, the Financial Secretary, further elaborated in the Budget of the Hong Kong Government. So far, the specific items of Exchange Fund bills have been finalized. The main reasons for the introduction of Exchange Fund Bills by the Hong Kong Government are as follows:
1. In the past, the Hong Kong Exchange Fund mainly came from the accumulated fiscal surplus and its investment income. With the continuous expansion of government fiscal expenditure, the growth of fiscal surplus is increasingly out of harmony with the demand for funds needed to intervene in the foreign exchange market. Therefore, it is necessary to adopt new methods to increase the exchange fund, and the appearance of exchange fund bills has adapted to this change. Joseph Yam, the financial secretary, said that these bills would be used for financial market operations to ensure the stability of the exchange rate, and Zhai Kecheng, the financial secretary, also said that issuing these bills was a way to replace financial market measures. At the same time, they all think that this move provides a flexible, low-risk and cost-effective method for taking financial market measures.
2, increase the government's financial instruments to regulate the economy. Because there is no central bank in Hong Kong, Hong Kong cannot control the short-term capital market interest rate by adjusting the deposit reserve and discount rate like other western countries, and can only raise or lower the preferential interest rate. For a long time after the implementation of the linked exchange rate system, all the pressures faced by the Hong Kong dollar exchange rate were basically borne by interest rates. In this case, interest rates fluctuate very frequently. In less than five years from June 1983 and June 17 when the linked exchange rate was implemented to July 1988, the preferential interest rate of Hong Kong banks was adjusted 46 times, with the range of 1 1.78. At the same time, interest rate adjustment relies too much on exchange rate changes, which greatly weakens the role of interest rate in regulating economy and controlling inflation. Sometimes interest rate changes serve the linked exchange rate, but their changes run counter to the actual economic situation. For example, when the economy is overheated and needs to be tightened, a large amount of capital flows in, which makes the Hong Kong dollar appreciate. In order to maintain the linked exchange rate, the Hong Kong government had to lower interest rates, which further aggravated inflation. In this case, the development of the Exchange Fund bill market business can provide the government with a means to adjust the economy, and then develop into an economic adjustment means similar to the "open market business" in other countries' monetary policies.
3. Prepare to issue medium and long-term bonds and Hong Kong government bonds. 10 Over the past years, international bond markets has developed rapidly, while the development of Hong Kong's capital market is much slower than that of other international financial centers. The industry believes that the lack of qualified national debt in Hong Kong is an important reason for the slow development of Hong Kong's capital market. When planning to develop the capital market, the Hong Kong Government will undoubtedly give priority to the development of the government short-term exchange fund bills market. What I want to mention here is that the British Hong Kong authorities will certainly consider their own interests when developing the capital market. As some Hong Kong people said, "The British have been here for 100 years, and they have never thought about developing the capital market. Now that they are leaving, they suddenly think of developing. " This point needs further study.
4. The preparations for the Hong Kong Futures Exchange to launch Hong Kong dollar interest rate futures are being stepped up. On the one hand, this business meets the needs of the market; On the other hand, it is expected to bring a turn for the future industry of Hong Kong. Interest rate futures participants will come from many aspects, and bill investors are an important part. Therefore, the cooperation between the introduction of interest rate futures contracts and the issuance of foreign exchange fund bills can provide a place for bill investors to transfer risks and stimulate the development of futures business. In other words, the issuance of Exchange Fund bills objectively increased the success of the interest rate futures market.