Glossary_of_terms.pdf

Here are the key points summarized in English:

• Aggregate Balance: the sum of balances in clearing accounts and reserve accounts kept with the central bank.
• Authorized Institution (AI): an institution authorized to carry on the business of taking deposits, which includes licensed banks, restricted license banks, and deposit-taking companies.
• Best Lending Rate: a benchmark interest rate used by banks to price loans.
• Certificates of Indebtedness (CIs): certificates issued by the Financial Secretary to be held by note-issuing banks as cover for banknotes they issue.
• Composite Consumer Price Index (CPI): a main consumer price index compiled based on the aggregate expenditure pattern of all households in Hong Kong.
• Composite Interest Rate: a weighted average interest rate of all Hong Kong dollar interest-rate-sensitive liabilities, which includes deposits from customers and other debt instruments.
• Convertibility Undertaking (CU): an undertaking by a central bank or currency board to convert domestic currency into foreign currency and vice versa at a fixed exchange rate.
• Convertibility Zone: the Hong Kong dollar-US dollar exchange rate band within which the HKMA may choose to conduct market operations consistent with Currency Board principles.
• Exchange Fund Bills and Notes (EFBNs): debt instruments issued by the HKMA for the account of the Exchange Fund, fully backed by foreign reserves.
• Monetary Base: a part of the monetary liabilities of a central bank, defined as the sum of currency in circulation, reserve balance or clearing balance, and Certificates of Indebtedness.
• Money supply: the total stock of money available in the economy, measured by three definitions (M1, M2, and M3).
• Nominal and Real Effective Exchange Rate (NEER and REER): an indicator of the overall exchange rate value of the Hong Kong dollar against a basket of currencies of Hong Kong's principal trading partners.