and there are still many challenges facing us. the hkma has therefore embarked on a review of our debt market development with a view to identifying measures which can be adopted to help market development. on the demand side, everybody knows that the mainland of china is enjoying a rapid economic growth and business opportunities are mushrooming. the recent announcement by the mainland authorities of measures to liberalise portfolio investment outflows has marked the emergence of such kind of opportunity for hong kong. under these new rules, each chinese citizen is allowed, among other things, to invest in fixed income securities overseas within certain limits. we expect that this will help boost the demand for fixed income securities although we do not know exactly how much such investment outflows will be approved by the mainland authorities in the initial years. given our experience and achievements in financial services and the fact that we are the only international financial centre of china, i am sure that hong kong is well positioned to grasp the opportunity. apart from the initiatives and developments i just mentioned, i believe that it would be useful to highlight a few fundamental factors which make hong kong an ideal place for the bond market. the first is our free capital mobility. the absence of capital controls means that there are no restrictions on foreign enterprises using our capital markets to raise funds. foreign investors can also freely invest in our markets and easily remit the proceeds back home. secondly, our well - developed financial markets, including derivative markets, would allow issuers and investors to manage any interest rate risk or exchange rate risk effectively. thirdly, hong kong has a critical mass of financial institutions which stand ready to support issuers to tap the capital markets. hong kong is also an asset management centre thus providing a large investor base for debt instruments. last but not least, the absence of capital gains tax and interest withholding tax would also favour bond market development. our exceptional geographical, cultural and language advantages also make hong kong an ideal place to link up the mainland of china with the rest of world. on our part, the hkma will continue to play a leading role in enhancing the development of the debt market in hong kong, by removing market frictions and unnecessary restrictions, and by keeping up with the best practices adopted in other well - developed markets. lastly, i would like to thank euromoney again for inviting me to speak. i look forward to the continued cooperation with our partners on the healthy development of the bond market in this region. thank you.

, housing finance companies ( hfcs ) and mutual funds ( mfs ), and extending a special refinance facility, which banks can access without any collateral. the reserve bank is also unwinding the market stabilisation scheme ( mss ) securities, roughly synchronised with the government borrowing programme, in order to manage liquidity. measures aimed at managing forex liquidity include upward adjustment of the interest rate ceilings on the foreign currency non - resident ( banks ) [ fcnr ( b ) ] and non - resident ( external ) rupee account [ nr ( e ) ra ] deposits, substantially relaxing the external commercial borrowings ( ecb ) regime, allowing the nbfcs and hfcs access to foreign borrowing and allowing corporates to buy back foreign currency convertible bonds ( fccbs ) to take advantage of the discount in the prevailing depressed global markets. the reserve bank has also instituted a rupee - dollar swap facility for banks with overseas branches to give them comfort in managing their short - term funding requirements. measures to encourage flow of credit to sectors which are coming under pressure include extending the period of pre - shipment and post - shipment credit for exports, expanding the refinance facility for exports, counter - cyclical adjustment of provisioning norms for all types of standard assets ( except in case of direct advances to agriculture and small and medium enterprises which continue to be at 0. 25 per cent ) and risk weights on banks'exposure to certain sectors which had been increased earlier counter - cyclically, and expanding the lendable resources available to the small industries development bank of india ( sidbi ), the national housing bank ( nhb ) and the export - import bank of india ( exim bank ). to improve the flow of credit to productive sectors at viable costs so as to sustain the growth momentum, the reserve bank signalled a lowering of the interest rate structure by reducing its key policy rate viz., the repo rate by 250 basis points from 9. 0 per cent as on october 19 to 6. 5 per cent by december 8, 2008. although, we remain vulnerable to global financial and economic developments, the measures taken so far have eased the liquidity and credit flow situations considerably. i must also add that in managing the impact of the global crisis, we have been mindful that no policy initiative is totally costless. managing this delicate balance between costs and benefits has been one of our challenges. the measures taken by the rbi have been appreciated