8.
Any implementation of the guarantee will be calculated on the basis of any change in the effective depreciation of sterling between the guarantee rate and the average effective depreciation in the period 1 April 1974 to 31 December 1974.
9. Assume for the purpose of the following hypothetical example that the average depreciation from Smithsonian parities during the period 25 September 1973 to 31 March 1974 was 17 per cent (the guarantee rate) and that the average depreciation for the new guarantee period 1 April to 31 December 1974 was 19 per cent. Implementation would involve restoring the value of eligible balances to the 17 per cent level, and the implementation payment due would be Ax83 Ax83
where
81
A,
A represents the amount of eligible balances. It is on this basis that any implementation payment that became due under the guarantee would be calculated.
HM Treasury
March 1974
3