+
5-
accumulation of sterling had run off, the oil developments in the Middle East produced new accruals of reserves to the 011 States whose resons for holding sterling as a reserve currency were less traditional and the balances thus became more volatile. accrual of sterling to the oil producing states has continued and accelerated in more recent years and in the Far East the Hong Kong/Malaysia/Singapore group of countries has added
substantially to its holdings.
Part of the large accrual of
reserves to Australia in recent years has also gone into sterling.
2.
After a period of stability in the first half of the 1960's
the sterling balances, particularly the official balances, declined
+
quite sharply between 1966 and 1968. Sterling Agreements the balances rose.
After the signature of the
In that period there was
a general increase in the level of external reserves of Sterling Area countries reflecting their overall balance of payments surplus. The formula under the Sterling Agreements which requires an established percentage of total reserves to be held in sterling would in the se circumstances result automatically in a rise in the sterling holdings. In fact, the signatory countries of the Sterling Agreements have, of their own free will, maintained aterling in excess of the minimum sterling percentage over most of
the lifetime of the Agreements to date.
3. Present forecasts suggest further surpluses in the balance of payments of the OSA as a whole during 1973 and 1974 resulting in reserve accruals of the order of £1 bn. to £l bn. in each year over a third to a half of which might be attributable to the oil producing states. Whether such accruals will result in substantial increases