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telegram to:
GOVERNOR HONG KONG
1.
দি
Ahn Stuart
SECRET
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Your tel No 1133: Sterling Agreement
We are most grateful for the estimates and other
under reference material set out in your telegram No 133 of 5 October
but we are still not sure that we precisely understand
the complete picture. Can you please give further help
therefore in filling it in?
2. We would be grateful for further clarification of
the figures in your paragraphs 1 and 2. Are the "banks
ready positions" of £213 million at 31 August directly
comparable with the £295 million advised by the Accountant General for 31 July? Af so, it appears that the banks
shed £82 million spot during the month, which is hard to
reconcile with the £6 million a week provided for in
Mrs Hedley Miller's letter of 10 August If so, please confirm our understanding that the banks' "net overbought
positions" at 31 August represent £213 million spot
holdings less £103 million forward sales.
3. Are we right in assuming that the £60 million net
overbought position, estimated in your paragraph 2,
represents the maximum amount of sterling that you consider
that the banks will still be holding spot after forward
sales, estimated as at 5 October, have matured. L 00,
the sum is very much less than the £190 million below which
the Hong Kong Government representatives estimated, at the
meeting at the Treasury on 10 August, that the banks would
not wish to g0.7
4. If our assumption on paragraph 3 above is correct, we would appreciate your views on whether the banks are likely to sell off still more of their sterling.
B