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3. In reply Mrs Hedley-Miller confirmed that time for such
discussions would be found in Dar-es-Salaam. The Treasury
ed
expect and intended to make time for comprehensive talks with
Mr Haddon-Cave. When he was last in London it had not been
possible to discuss the proposals then in mind for a
unilateral guarantee since they had not been approved by
Ministers. The idea of the present declaration was essentially
to carry out a holding operation. This was an interim approach.
For a number of reasons HMG had had to make the offer unilat-
erally without negotiation. In these circumstances it was
difficult to think of modifications or negotiations on the offer.
4. Two questions needed to be considered: 1. the minimum
sterling proportion (MSP) and 2. the sterling holdings of the
Hong Kong banks. It was true that Hong Kong had a high MSF
but they were not the only overseas holders of sterling who
did not like the proportion fixed for them. It was not easy
to contemplate changes in the context of a unilateral temporary
offer. She did not mean to slam the door against all possi-
bility of modifications: but it should also be borne in mind
alertas or
that existing MSP's were to be retained for the interim period:
"the"
it was not as though HMG had ignored concern about MSP levels
in terms of a new long term arrangement.
5.
On the question of the Hong Kong banks' holdings of
sterling Mrs Hedley-Miller said it would be helpful if we
could know how much sterling the commercial banks were actually
holding. It might be that they had already shed a great deal
of sterling to the point where they would not wish to diversify
further. If so, the problem might to some extent already be
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