wholly at the expense of the UK. Hence, in return for the
guarantee that we have offered, sterling holders are being
asked to continue to maintain a certain minimum proportion
sive had useful discussions We have
of sterling in their reserves.
on
these prenosals, both with the Govenor and with the Hong Kong cinareal saratan's and ond comentlations are Hill get-ion
At no stage, either under the previous Sterling Agreements
or under the proposed arrangement that is at present being
discussed, has HMG sought to take advantage of the special
constitutional situation of Hong Kong or of any other
sterling holders that are in greater or lesser measure
dependent on the UK Our approach to this issue in our
discussions with Hong Kong has been essentially the same
as that adopted vis-a-vis other large holders of sterling,
subject of course to the obvious need to tailor arrangements
to some extent to suit the particular circumstances of
individual holders.
In short, I do not regard the claim of unfair treatment
for Hong Kong that is implicit in the Civic Association
letter as at all justified, and I hope that you may be
able to persuade your correspondent that HMG has taken a
fairer stand than his letter gives us credit for.
P.J.J