CONFIDENTIAL
Mr Payton's conversation with the Accountant General (Bank Note for the Record dated 28 March) included a reference to expected 28 February holdings of £313m. (including March interest accruals and topping up).
9. If Hong Kong's MSP had been 78.8% rather than 78% the deficiencies according to our understanding of the accidental breach provision would, of course, have been increased. would also have occurred in November and March.
Deficiency
on basis
of 78.8%
They
The figures are:
£000
Deficiency
on basis
of 78.0%
MSP
MSP
November
2,940
}
December
6.987*
3,918
January
11,105
7,961
February
6,781*
3,712
March
1,748
*Based on September-based MSH. operative.
10.
In the other months the MSP is
Because of the ambiguity of the position there is little point in pursuing the breaches which occurred in November and March on our understanding of the guarantee arrangements.
11.
The larger end-February deficiency, on the basis of which it seems Hong Kong has been working, does give scope for counting under the modified settlement basis for end-March more of the interest accruals and topping purchases than we had expected. (I include here also the excess of receipts over payments, which, as you agreed, is clearly analogous to interest accruals)
We need,
4