3.
24 September sterling figures) and to the extent that they diversify on that date sone 50 million they receive from Government in compensation
under the internal guarantee arrangement.
Haddon-Cave estimates forward sales at £100 million
and believes that the banks would continue to hold the remainder (£195). At the same date they had
sterling liabilities of £124 million and an over- bought position of about £70 million seems feasible.
He also considers that the banks will sell for
dollars the £50 million of compensation they receive.
The effect on the above figures would be:
1
First alternative position at 24 Bentenber
£ millions
Government
Banks
Total official sterling
Total external reserves
Sterling
Other
#
Currencica
85
330
195
། ིི༅།g
86%
The extreme position for Hong-Kong would be if the bunks diversified all their sterling and held only US dollars (now the intervention currency) in their
This would have the foreign currency assets. advantage for the Hong-Kong Government of letting
them out of local guarantee obligations.
So far as
the UK is concerned we would have to tolerate a
further diversification of £195 million, but having