ABSTRACT
The absence of a central bank or of a similar type of institution in Hong Kong has meant that issues of monetary policy have always been connected to the exchange rate regime. As has already been mentioned in Chapter 2, the role of the two note-issuing banks (NIBs), Hongkong Bank and Standard Chartered has been akin to that of a central monetary authority, at least in terms of control over the quantity of cash. However, even this statement is not quite accurate in view of the frequent changes in the note issuing arrangements. The role and function of the Exchange Fund, also briefly mentioned in Chapter 2, has undergone a number of subtle changes, especially after July 1988, but, as an institution, it is still not near an embryonic central bank.
