Cool fellow, HKIND
8727/ia
Mr Burratt
Mra Hedley-Miller
Cambridge
Trinh VinG
Copy sant to the Holland сору
27/9
MF9/393/1
1
168
+
My discussion with Mir Haddon-Cuve took the form of
•
an examination of Hong Kong's capability of
purticipating in the guarantee in the light of the current reserve position and the likely situation on
24 September. we wereed to treat thia us an
immediate practical exercise qulle parato from
Hong Kong'o expressed wish to consiler long-tera
arran, ementą.
It helpe when examining liong Kong's position to keep
in mind the oddition of the financial structure.
· The Administrati n are regarded by the population of
Hong-Kong us cu todians of their reserves and the
Financial Secretar, 1. o to amw r in the Legislature
for hle management of them. The rupervco consist of
Luigetar, fwalo, and the usual Colonial e aplex bf
Government funle statutorily or custom. rily maintained
in sterling, together with the Exchange Fun! which
represents the counterpart of the note issue
mungod by the comm rcial banks.
The inglunion of
certain commercial banking funds in the official sterling reserves was justified in 1963 n the Jrounds that Hong Kong lia no Contral Baak to regulate money and foreign exch ne markets. primary source of foreign exer nge for the private
sector is therefore the comarcial banks whose
The
at rling was regarded s part of Hong-Kong'a totul