C.S. 20A (Rev.) 2600027
From the Governor, Hong Kong
SAVING TELEGRAM
To the Secretary of State for Foreign and Commonwealth Affairs
Repeated to:-
Repeated to:-
Date...
27th January 1989
My Reference. EF121/2C (88) IV
Your Reference HKK 102/1
No.
5
No.
No.
Fiduciary Note Issues
NT
In your LUR of 27 May 1976 you gave approval
for the note-issuing banks to deposit securities issued
or guaranteed by the Hong Kong Government
Government in respect of
their fiduciary note issues as an alternative to British
Government stock.
2.
At the present time
time there is a limited supply
of paper issued or guaranteed by the Hong Kong Government andras su ma
and the supply will be further reduced in April 1989 when
$1 billion of Hong Kong Government Bonds issued in 1984
mature. One of the note-issuers, the Hongkong and Shanghai
Banking Corporation, has suggested the further alternative
of depositing United States Treasury Notes. Given the
establishment of the Hong Kong dollar/United States dollar
link since 1983 we see this as a sensible idea which would
obviate the need which arises in the case of gilts to
make adjustments from time to time for changes in the
exchange rate. Standard Chartered Bank have also been
consulted and have indicated that they also would like
to have this alternative.
/ Cont'd