•HGISTRY NO.91
•
17.3
H.K. D.I.B
Thursday, March 15, 1973
BRITAIN URGED TO GUARANTEE H.K. STERLING ASSETS
Proposal To Develop Foreign Currency Market Welcomed
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The Government was today urged to ask the British Government to
guarantee all or at least a substantial part of Hong Kong's Sterling
assets in terms of Hong Kong Dollar or in gold.
Debate.
The proposal was made by the Hon. Q.W. Lee at the annual Budget
He recalled that Hong Kong's external assets had been depleted
twice in recent months.
Despite this, Hong Kong Dollar was still faced with the dilemma
of further uncertainties because of the current international monetary
problems.
The urgent question now confronting Hong Kong, he said, was how
best to protect the value of our reserves.
He said: "It is contrary to economic sense for a territory with
a sound economy such as ours to hold most of its reserves in the currency
of a country such as Britain whose economy is full of uncertainties and
problems.
"If for any reason we still have to keep a greater part of our
reserves in Sterling, we must be given more effective protection by the
British Government against future weakness of the Pound."
Otherwise, he said, there seemed to be "no other solution except
for us to run down the bulk of our Sterling holdings and to seek diversification
into other forms of investments. 11
/Mr. Lee