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(d) because of depressed prices in the gilt edged
market it would not be in Hong Kong's interest to sell sterling securities, at least for the next few months;
(e) future additions to Hong Kong's "official" external reserves may be held in foreign currencies other than sterling without prejudice to Hong Kong's participation in the guarantee.
It would not be the intention to publish Hong Kong's total "official" reserves because, by subtracting published figures for other accounts, it would be possible to deduce the Exchange Fund's position and make a guess at the extent to which the note issue is backed by sterling and other foreign currency assets (information not normally published).
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Honourable Members will be asked to advise:
(a) whether the British Government should now be informed that Hong Kong will participate in the unilateral offer made in the Declaration of 6th September 1973, on the lines set out in paragraphs 3-5 above; and
(b) whether publicity should be handled on the basis
of (a) to (e) in paragraph 7 above.
(The Solicitor General (Mr G. C. THORNTON), the Accountant General (Mr D.W.A. BLYE) and the Principal Assistant Economic Secretary (Mr A.D. OCKENDEN) will attend before the Council for the discussion of this item).
6th December 1973
(SCR 9/2201/73)
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