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external reserves, for the purposes of the sterling
guarantee. The Hong-Kong Government'à counterpart
guarantee to the banks offered compensation for
variations in the long-Kong dollar/sterling rate.
Amounts brought into the guarantee have had to be
specified and a churge paid. At 6 July 1972 the
Hong-Kong Government ruled out further additions
**
to the guarantee arrangement, the total liability
was then £450 million, und compans tion on this
amount his to be paid to the banks on the basis of
the Hong-Kong dollar sterling rate ut 24 Septe :ber.
This is expected to cost about £50 million.
The
The banks hold a great deal less sterling now.
fɔ.lowing figur 9 although unsuitable for accounting
urposes are adequate for assessing proportions in
negotiation.
Latest available position July 1973
C millin
MSP 89%
Sterling
Other Currencies
Government
Banks
380
85
295
Total official sterling
675
88.9%
Other currencies
85
Total external reserves
760
By 24 September position will have changed to the extent that banks will have sold sterling forward (forward sales must be deducted to establish the