OPS 150
RESTRICTED
DIP
IMMEDIATE
CYPHER/CAT A
FN F C 0 2219 3AZ
LAST
REF.
EL
NEXT
REF
DEDIP
1974
TO IMMEDIATE CANBERRA TELMO 263 OF 22 MARCH AND TO IMMEDIATE PRETORIA, KUALA LUMPUR, SINGAPORE. INFO IMMEDIATE HONG KONG, ROUTINE C.G. CAPE TOWN,
MIPT: EXCHANGE CONTROL
FOLLOWING IS TEXT OF PARA 7 OF CHANCELLOR'S MESSAGE:
7. THIS CHANGE WILL HAVE ONLY AN INDIRECT EFFECT ON THE VOLUME OF UK PORTFOLIO HOLDINGS OF OVERSEAS STERLING AREA SECURITIES, BECAUSE MANY OF THESE ARE PRIMARILY TRADED IN LONDON ON A
STERLING MARKET, THE 25 PER CENT REQUIREMENT WILL THEREFORE BE SATISFIED BY THE PURCHASE AND SALE IN THE LONDON MARKET OF THE APPROPRIATE AMOUNT OF VESTMENT CURRENCY, WHICH IS JUST AS LIKELY TO DERIVE FROM SALES OF NON-STERLING AREA AS OVERSEAS STERLING AREA SECURITIES. IN ANY CASE THE OVERRIDING CONSIDERATION DETERMINING THE AMOUNT AND PROPORTION OF UK TIIVESTMENT IN OVERSEAS STERLING AREA SECURITIES WILL BE THE RELATIVE ATTRACTIVENESS OF THE MARKETS AND THE 25 PER CENT REQUIREMENT WILL NOT ALTER THIS.
CALLAGHAN
NO DISTRIBUTION:
HEAD FRD
MR. MARSHALL
PA
2
COPIES TO:
PS TO CHANCELLOR OF EXCHEQUER MR. D.J. MITCHELL, TREASURY MR.T.V. BURGNER, TREASURY
RESTRICTEDR. E.B. FENNETT, BANK OF ENGLAND
B7
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