CONFIDENTIAL
3
An
I would tend to share the Hong Kong Government's preference for not wanting to attract an unnecessary spotlight at this time on to the management and use of the Exchange Fund, so there would be a case for going along with their proposal to look for a suitable opportunity to make the necessary amendment when some other alteration seemed desirable. But this would depend on transfers from the general revenue not constituting borrowing. alternative half-way house, as a temporary measure, but probably not a desirable one, would be for the Secretary of State to give his permission to an increase in the limit specified in Section 3(4) in order to accommodate the required transfer and to give a breathing space before the full amendment to the EFO can be made; but I do not know to what extent this would be legally acceptable, knowing what we now know (or think we know).
Yours on cardy,
Cinni Gistan
Си
C D Elston
сс Miss M O'Mara, HMT
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