10 Years Ago HONGKONG (September 28): THE Government's move in July to take away some of Hongkong Bank's central bank functions will allow the Government to more easily de-link the Hongkong dollar from the US dollar, according to a study by BT Brokerage. It added that the Government is 'very likely to assume additional central bank functions in the near future'. 'In the longer term, the Government will acquire the ability and experience to fine-tune the interest rate structure to a certain extent, and subsequently should have some direct control over inflation'. The Hongkong Bank controlled interbank liquidity until the Government began to assume this responsibility starting July 18, when it introduced a new 'accounting arrangement' which gave it control over Hongkong dollar exchange rates and interbank rates. Under the arrangement, the Government replaced the Hongkong Bank as the ultimate provider of interbank liquidity. 'This development is unprecedented in the history of Hongkong and it clearly represents the infancy of a fully-fledged central bank,' said the study. The Government's plan to study debt instruments, set up a Government dealing room and to invite other banks to be the Exchange Fund's counter-party in its market intervention operations, all suggested that it was consolidating its new power rapidly, BT said.