Following is the transcript of the remarks by the Chief Executive, Mr Tung Chee Hwa, at the airport on his return from a visit to Brussels and London today:

Question: Could you tell us how the government is going to handle the pressure on the Hong Kong dollar and the interest rates which are affecting the stock market?

Mr Tung: I'm sorry, I will repeat it in English. I said while I was in London, both the stock market and the currency market had volatility in here. I stayed in close touch with the Financial Secretary. And first of all, let me emphasise to you the government's determination to maintain the linked exchange rate. It has served us well, it will continue to be important for our future prosperity. We're very determined in this regard and I think what Donald Tsang and our other colleagues have done is really admirable. Very quick response, strong signal to the market place - we're determined to maintain this exchange rate and it's already having its affect. The real reason is this, that our fundamentals are very good. We have the third largest foreign exchange reserve, we have a huge fiscal reserve, the running budget surpluses, our economy continue to expand. But speculators see what happen in other currencies in Southeast Asia, they thought they wanted to have a go here, but we will make sure they will not succeed in whatever they're trying to do. In the process, of course, the stock market is affected because interest rate has gone up in defending the dollar. But the fundamentals of the listed companies in Hong Kong are also good, most of the companies would be reporting I believe double digit growth in profits. The fundamentals are good, so yes, we are being hurt short term in the stock market because of high interest rate, but I believe it will not be a long term effect.

Question: Apart from defending the peg and warding off speculators, do you plan any other measures to prevent any more of the free fall that we saw yesterday? Will there be a bank holiday declared 'Markets asked to close' and do you plan to have an emergency meeting in ExCo as a result of this? Is this one ... ?

Mr Tung: This has been expertly handled by my colleagues under the leadership of Donald. It's going very well in the way we're managing this particular event. No, we will let the stock market operate as the market. The market has fallen, but at a certain level it become good buys and then there will be buyers in the market and the market will start to rebound. The key is this, that the market started to fall because there was anticipation of a speculative attack on the Hong Kong dollar, interest rates started to edge up and in fact, as you know yesterday, because of our determination, the interest rate went up a whole lot. And of course, the stock market responded. But we believe this will be short term, that we'll be able to beat off the speculators on the currency side and as far as the stock market is concerned, the fundamentals are good, most of our listed companies are doing well and people will see good buy, they will see good values and they will come in - not just in Hong Kong - they will compare our values with all the other stock values around the world and in Asia, and I think eventually they will conclude this is a good buy. But we will let the market decide.

Question: Mr Tung, lots of people are saying that it's not justified to sacrifice the local economy to save the Hong Kong dollar, so what is your comment?

Mr Tung; Well, the stability of the Hong Kong dollar lies at the very heart of our economic stability and it is important that as we move forward, to make sure the linked exchange rate is maintained. And as I said earlier on, that we're trying to bid off speculative attacks on the Hong Kong dollar, and I think we will succeed in this. We have really very good professional management who responded very quickly to these attacks, and the result of that is an increase in interest rate. And so there is a temporary setback in the stock market, but I believe this will be short lived.