HONG KONG MONETARY AUTHORITY Annual Report 1996
HONG KONG MONETARY AUTHORITY
The concept of a mutually independent monetary relationship is an elaboration of the Sino-British Joint Declaration and the Basic Law which provide the future Hong Kong Special Administrative Region Government (SARG) a high degree of autonomy under the "one country, two systems " principle. Such autonomy in the financial and monetary aspects is essential for Hong Kong to maintain its status as an international financial centre (see box below). In fact, with the legislative changes undertake in the last few years, the future Hong Kong SARG will enjoy an even higher degree of monetary autonomy than at present. This includes the transfer of power over the control of the Exchange Fund from the UK Secretary of State to Hong Kong's Financial Secretary.
ENHANCED PARTICIPATION IN MULTILATERAL AGENCIES
In 1996,the HKMA intensified its participation in the multilateral institutions to keep Hong Kong in the forefront of financial and monetary developments. The HKMA participated in the annual meetings of the Asian Development Bank (ADB), the International Monetary Fund (IMF) and the World Bank. The HKMA also participated in the series of donors meeting negotiating the replenishment of the Asian Development Fund.
MONETARY RELATIONS BETWEEN THE MAINLAND AND HONG KONG AFTER 1997
| 1. | The monetary and currency systems of the mainland and Hong Kong will remain mutually independent. The Renminbi and the Hong Kong dollar will circulate as legal tender in the mainland and Hong Kong respectively and will be regarded as foreign currencies in each other's territory. |
| 2. | The HKMA and the PBoC will maintain a mutually independent relationship and the HKMA will be accountable only to the Government of Hong Kong. |
| 3. | Co-operation of the supervisory authorities of the mainland and Hong Kong will be maintained. |
| 4. | The PBoC will provide support for maintaining the currency stability of Hong Kong if necessary and only at the request of the HKMA. |
| 5. | All financial claims and liabilities between the mainland and Hong Kong will be handled in accordance with internationally accepted rules and practices. |
| 6. | Mainland financial institutions operating in Hong Kong will be supervised by the relevant regulatory authorities in Hong Kong. |
| 7. | Shanghai will not take the place of Hong Kong as an international financial centre. The two will be complementary to each other. |