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Telex received in clear from ~
ACCOUNTANT GENERAL TREASURY
Despatched:-
Received: 09.11
GOVERNMENT OF HONG KONG
HONG KONG
Tuesday, 19th March 1974 Tuesday, 19th March 1974
OUR REF EF.26/6 PT.2
10.
THANK YOU FOR YOUR 13.
I HAVE BEEN UNABLE
FOR PAYTON FROM BLYE.
THERE SEEMS TO BE SOME MISUNDERSTANDING.
TO CONTACT THE FINANCIAL SECRETARY TO DISCUSS THE POINT RAISED IN YOUR MESSAGE BUT IN VIEW OF ITS IMPORTANCE I AM TAKING IT
UPON MYSELF TO REPLY IMMEDIATELY.
IN PARAGRAPH 4 OF OUR 1317 DATED 17TH NOVEMBER TO FCO WE EXPLAINED THAT UNTIL THE MONTH END VALUATIONS OF OUR GILT EDGED HOLDINGS HAD BEEN MADE WE WOULD NOT KNOW WHETHER THE TOTAL VALUE OF OUR MONTH END STERLING HOLDINGS IS EQUAL TO OUR AGREED
MSP.
SINCE THAT DATE THE GILT EDGED MARKET HAS AS YOU KNOW
WHEN THE MONTH END VALUATION HAS BEEN WEAKENED CONSIDERABLY.
MADE WE HAVE OBTAINED THE STERLING NECESSARY TO BRING OUR HOLDINGS OF THAT CURRENCY UP TO THE AGREED MINIMUM BEFORE THE DATE THE ADVICES ARE NEXT DUE AFTER THE ADVICE DATE ON WHICH
THE FAILURE OCCURRED.
WE HAVE SO FAR BOUGHT ABOUT L10.6 MILLION FOR THIS PURPOSE AND
OUR PRELIMINARY FIGURE FOR FEBRUARY COMPLETED TODAY INDICATE THAT ANOTHER L4 MILLION WILL HAVE TO BE PURCHASED BEFORE THE END
OF THIS MONTH MAKING A TOTAL OF L14.5 MILLION. AS I SEE IT THIS
IS STRICTLY IN ACCORDANCE WITH THE AGREED ARRANGEMENT AND I DO
NIT UNDERSTAND WHY YOU SAY THE ARRANGEMENTS GO BEYOND THE TERMS
AGREED FOR DEALING WITH ACCIDENTAL BREACHES WHICH ARE SET OUT IN
FCO TELEGRAM 1209 DATED 26TH NOVEMBER.
I SHOULD PERHAPS ADD
THAT THERE HAVE BEEN NO SWITCHES OUT OF STERLING INTO OTHER
CURRENCIES AND THAT IN TOTAL THE VALUE OF OUR HOLDINGS OF GILTS
PS FALLEN BY L29 MILLION SINCE 25TH SEPTEMBER
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