Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Tokyo Joe's Cafe / Societe Anonyme/No Pennies -- Ignore unavailable to you. Want to Upgrade?

To: The Street who wrote (3244)	9/5/1998 1:09:00 PM
From: TokyoMex	Read Replies (1) \| Respond to of 119973

Street ,, Get off of it ,, ;-) Monetary crisis ,,, taking a bit too far ,, Saturday September 5, 7:51 am Eastern Time FOCUS-HKMA unveils moves to strengthen HK dollar peg (Adds byline, details, updates throughout) By Andrea Ricci HONG KONG, Sept 5 (Reuters) - The Hong Kong Monetary Authority (HKMA) on Saturday unveiled a series of new measures to strengthen the territory's linked exchange rate system and reduce interest rate volatility. The measures, which officials described as a purification of Hong Kong's currency board system, included new rules for currency conversion and moves meant to bolster liquidity. ''These measures aim at strengthening Hong Kong's currency board arrangements and achieving an even higher degree of transparency and disclosure,'' HKMA chief executive Joseph Yam told a news conference. The measures would make Hong Kong's 15-year-old currency board system, which pegs the Hong Kong dollar to the U.S. dollar, less susceptible to manipulation and could reduce the need for government stock market intervention, he said. The Hong Kong government intervened heavily in the stock and futures markets in August to foil speculators who had attacked the Hong Kong dollar with the aim of driving interest rates up and stock prices down to take profits on short stock positions. As part of its new measures, the HKMA replaced its Liquidity Adjustment Facility (LAF) with a discount window with a single Base Rate rather than a bid-offer spread used under the LAF, reducing the authority's discretion to affect rates. The HKMA removed most restrictions on repeated borrowings from the discount window. The restrictions were put in place last year to make it more difficult for speculators to fund attacks on the Hong Kong dollar but had the unwanted effect of squeezing liquidity as banks avoided the LAF for fear of being penalised. The HKMA said no new issues of paper other than government Exchange Fund bills and notes backed by foreign reserves would be accepted as collateral at the discount window. Currently, some other highly rated debt securities are eligible. Allowing freer access to day-end liquidity through the use of the Exchange Fund paper fully backed by foreign reserves would dampen interest rate volatility without departing from the discipline of the currency board arrangement, the HKMA said. To that end, the authority said it would issue new Exchange Fund paper only when there was an inflow of of funds, assuring that all new paper would be fully backed by foreign reserves. Yam said the measures would make it much more difficult for speculators to attack the Hong Kong dollar. Liquidity as represented by the aggregate balance in the banking system currently is less than HK$2 billion, making it easy for speculators to boost interest rates with small outlays. With some HK$96 billion of Exchange Fund paper outstanding, liquidity is potentially much greater, Yam said. ''Speculators would probably need to short about HK$30 billion before interest rates go sharply higher, sending the stock market down,'' he said. The HKMA will publish a Base Rate every day starting from Monday. The rate would be market sensitive, but the methodology for determining the rate still needed to be honed, Yam said. He suggested an average of the overnight and one-month Hong Kong interbank rates might be used as a reference initially. The authority said it stood ready to convert Hong Kong dollars in the clearing accounts of licensed banks into U.S. dollars at a fixed exchange rate of HK$7.75 per dollar. The move ''purified'' the system because by currency board rules, aggregate balances as one of the liabilities of the currency board should be transferable into U.S. dollars. ''The rules of the currency board say that you have to convert your liabilities into U.S. dollars,'' Yam said. The authority chose 7.75, rather than the peg rate of 7.78, because it was closer to the current market level and has been an intervention point for the HKMA. The Hong Kong dollar was linked to the U.S. dollar at a rate of HK$7.8 per US$1 in 1983. It is permitted to trade in a narrow band around that level and typically trades on the strong side. ''If all of a sudden when the market rate is near 7.75, you remove that support to 7.78, then all these stop losses will be triggered and there will be volatility,'' said Yam. The HKMA intended to change its convertibility undertaking to 7.80 when the spot rate strengthened, he said. -- Hong Kong Newsroom (852) 2843-6371; Fax (852) 2845-0636 -- hongkong.newsroom@reuters.com -------------------------------------------------------------------------------- Related News Categories: currency, US Market News

To: The Street who wrote (3244)	9/5/1998 1:14:00 PM
From: TokyoMex	Read Replies (1) \| Respond to of 119973

Saturday September 5, 3:58 am Eastern Time Japan finmin sees possible Japan stock recovery The source said that the United States was not necessarily negative towards the yen's rise, but added that Rubin was unable to say that America's strong dollar policy had changed. He said the U.S. and Japanese authorities had not discussed foreign exchange levels in their talks here on Friday. But he added: ''I don't know why the yen has strengthened this much the last week or two, but the correction has started and I hope the correction will continue.'' The source also said that Rubin's comment that he shared Japan's concern about the yen's weakness ''has some significance.'' Another Japanese government source said that U.S. officials had expressed concern that a 13 trillion yen fund for recapitalisng Japanese banks might not be sufficient and wanted to know when public money would actually be put to use. Earlier this year Japan enacted a 30 trillion yen financial stabilIsation fund including 17 trillion to protect depositers, 13 trillion to recapitalise banks. -------------------------------------------------------------------------------- Related News Categories: US Market News

To: The Street who wrote (3244)	9/5/1998 1:16:00 PM
From: JEB	Read Replies (1) \| Respond to of 119973

They won't go back to the old gold backing or even a pseudo-gold backing standard. This current government only knows about deficits and treasury debts and how to create them. How would they get by without their old social programs? Even the Republicans believe in modified programs to a certain extent.