CYPHER/CAT A 6-P5250
F1 FC 0 21160pZ
RESTLICTED
RESTRICTED
TO PRIORITY WASHINGTON TELNO 1818 OF 21 JULY 1973, INFO HONG KONG (FOR GOVERNOR AND B CAR FE)
HONG KONG/U S CURRENCY PROBLEMS
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HRk184/1.
2 4 JUL 1978
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MIPT: FOLLOWING IS TEXT OF NOTE TO STATE DEPARTMEN
NR
I HAVE THE HONOUR TO REFER TO THE LETTER FROM MR JR ATWOOD TO MR MP SHOVELTON DATED 14 APRIL CONCERNING THE CURRENCY PROBLEMS IN
KING KONG.
See (it 36.) the
2. H M G HAVE LOOKED AT THIS MATTER AGAIN IN THE LIGHT OF THE VIEWS EXPRESSED IN THAT LETTER BUT THEY ARE UNABLE TO ACCEPT THAT THERE IS QUOTE NO DISCRIMINATION AGAINST PASSENGERS PAYING IN THE LOCAL CURRENCY UNQUOTE. THE STATEMENT OVERLOOKS THOSE FILINGS MADE BY US AIRLINES WHICH ALLOW PASSENGERS BUYING TICKETS IN HONG KONG TO PAY THE US DOLLAR PRICE AS SPECIFIED IN THE US A. FOR EXAMPLE A PASSENGER CAN PAY 656 US DOLLARS FOR TRAVEL AT THE ECONOMY FARE IN
ЯTHER DIRECTION BETWEEN HONG KONG AND SAN FRANCISCO BUT MUST PAY MORE THAN THE EQUIVALENT VALUE IN HONG KONG DOLLARS AT MARKET RATES IF HE WISHES TO PURCHASE A HONG KONG ORIGINATING TICKET WITH LOCAL CURRENCY. (THE FARE IN HK DOLLARS IS, IN FACT, HONG KONG DOLLARS 3662, A CONVERSION RATE OF HONG KONG DOLLARS 5.582 DOLLARS US 1 AT THE MARKET RATE OF DOLLARS HONG KONG 4.597 THE FARE WOULD BE
DOLLARS HONG KONG 3016).
H
3 H M G CANNOT ACCEPT IN PRINCIPLE THAT THERE SHOULD CONTINUE TO BE
A DIFFERENCE BETWEEN THE LEVELS OF HONG KONG ORIGINATING AND US ORIGINATING FARES SOLD IN THE LOCAL CURRENCY PURELY BECAUSE OF THE
OFFERENCE BETWEEN THE ARTIFICIAL RATE OF EXCHANGE AND THE PREVAILING MARKET RATES FOR CONVERSION FROM US DOLLARS TO HONG KONG
DOLLARS. H M G HAVE TAKEN STEPS, AFTER CONSIDERATION OF THE ARGUMENTS MADE BY THE US GOVERNMENT, TO CORRECT A SIMILAR IMBALANCE ON THE NORTH ATLANTIC AND IN ACCORDANCE WITH THE EXCHANGE
OF LETTERS BETWEEN AMBASSADOR BOYD AND MR W P SHOVELTON OF 23 JULY 1977, THEY CONFIDENTLY LOOK FORWARD TO THE UNITED STATES AUTHORITIES TAKING ACTION WITH REGARD TO HONG KONG'S PROBLEMS.
OWEN.
FILES MAED
HK GD
NAMO.
MISS BROWN.
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