HONG KONG RAISES EXCHANGE FUND BORROWING LIMIT
The borrowing limit of the Hong Kong
Exchange Fund, set up to regulate the value of the Hong Kong
dollar, has been raised to 50 billion H.K. Dlrs from 30 billion
by the legislature, an official statement said.
    The limit governs total borrowing by the fund from the
government's general revenue account and various funds as well
as borrowing by the fund arising from money market operations.
    The bulk of the government's fiscal surplus is invested by
the Treasury with the exchange fund against the issue by the
fund of interest-bearing debt certificates, Financial Secretary
Piers Jacobs said.
    "At the close of the business today, the total amount of
debt certificates issued by the Exchange Fund in return for
money transferred from the general revenue account and the
various funds, in other words the total borrowing by the
Exchange Fund from these sources, will be 26.9 billion dlrs,"
Jacobs said.
    He said borrowing arising from money market operations
would amount to an additional 2.9 billion dlrs, making a total
of 29.8 billion dlrs, just short of the borrowing limit of 30
billion dlrs.
    Jacobs said the government's fiscal reserves are expected
to total 32 billion dlrs by the end of the current fiscal year
ending March 31.
    "The current borrowing limit of 30 billion dlrs will,
therefore, constrain the ability of the Exchange Fund to
continue to take in these fiscal reserves by the issue of
interest-bearing debt certificates," he said.
    "It will also constrain the ability of the exchange fund in
its money market operations," he added.
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