GRS 345
EN CLAIR
FM HONGKONG 2406452
ICLASSIFIED
ORWELL
TO ROUTINE FCO TEL BTC 123 OF 24 SEPT. 1973.
PA.
У жидка
to
25. Tx
STERLING.
}
IN SPEECH TO ROTARY ON 21 SEPTEMBER, KILLAR (CHIEF MANAGER OF
CHARTERED BANK) DESCRIBED PROPOSALS FOR EXTENSIONS OF STERLING
GUARANTEE AS VERY UNSATISFACTORY'' AGAINST BACKGROUND OF BRITISH
ECONOMIC OUTLOOK WHICH HE SAID COULD NOT BE VIEWED FAVOURABLY
AS HE HAS DONE ON PREVIOUS OCCASIONS HE REFERRED TO AND IMPLIED
AGREEMENT WITH - CAMBRIDGE ECONOMIC SERVICE FORECAST OF BALANCE
OF PAYMENTS DEFICIT OF OVER POUNDS STERLING 1,000 M. FOR 1973.
HE SUGGESTED THAT HONG KONG HAS BEEN UNFAIRLY TREATED SINCE 1971
BECAUSE THE PARITY BASIS WAS NOT REVISED WHEN U.S. DEVALUED. HE
ALSO CRITICISED CLASHED'' WAS THE PRESS WORDD THE 89 PERCENT
**MINIMUM STERLING PROPORTION, AND SAID THAT IF EXTENSION OF
GUARANTEE IS TO BE ARRANGED IT IS CLEARLY IN HONG KONG'S INTERESTS TO REDUCE THE PROPORTION TO A MORE REASONABLE LEVEL AND ACHIEVE
SOME REASONABLE MEASURE OF DIVERSIFICATION INTO OTHER CURRENCIES"
HE REGRETTED THAT ''U.K. GOVERNMENT HAS COME TO THE NEGOTIATING
TABLE SO LATE IN THE DAY, DESPITE EVERY EFFORT ON THE PART OF THE
HONG KONG GOVERNMENT TO ESTABLISH A DIALOGUE''. HE RECOGNISED
DIFFICULTIES OF FINDING OTHER ALTERNATIVES WHILE MONETARY SITUATION
IS UNCERTAIN.
/IN PRIVATE