!
NOTE FOR RECORD
14.5.73.
5.2
I don't distant
P.S. Cry & FRD if they don't have one
Стру
Hong Kong Sterling Agreement: Diversification
It was agreed in an exchange of letters between Bell at the
Treasury and Haddon-Cave, Financial Secretary of Hong Kong, that a
phased diversification of the Hong Kong commercial banks' sterling
holdings should take place at the rate of about £20 mn. aˆmonth between November 1972 and April 1973 by which time transfer of
£100 mn. would be completed.
€100
When I was in Hong Kong last week I asked how the programme
had been going and whether there was likely to be any request for
further diversification. Apparently none of the £100 mn. has been
diversified into other reserve currencies because the demand for
sterling in exchange for Hong Kong dollars by the Bank of China has been constant. £90 mn. of the £100 in. has been used up (1.8.
reserves overall have gone down) in this way. The Accountant General
thought that there would be little point in seeking an extension of
the arrangement because the run down of commercial bank sterling to
'the Bank of China seemed likely to continue. I suggested that ho
should write a letter to London reporting, the situation.
S.W.P
Bouglan
&Jone
1
14th May 1973..
1