Lack of Consultation with Hong Kong over:
4.
(a)
floating of sterling.
It is difficult to
and
(76)
imagine Mr Woo is seriously suggesting that
HMG could have consulted Hong Kong in advance;
"exclusion" of Hong Kong from the Overseas
Sterling Area.
It is not true to say that Hong Kong (or anybody else) was
"excluded" from the Overseas Sterling Area (OSA) in June 1972.
What happened was the imposition of exchange control on
financial transactions between the UK and the OSA (except the
Republic of Ireland). This was necessary to prevent possible
speculative outflows of capital following the floating of sterling
in June 1972. So far as we are aware, the imposition of exchange
control to the OSA has not given rise to any significant
difficulties.
CONFIDENTIAL
(3001) Dd.145244 400m 8/73 L.Ltd. Gp.839
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