fact that the HK dollar is currently trading at 15.1:1.
(iii) HMG could state that if the HK dollar in the
future dropped more than 25% below the average rate
over the period 1987-1990, then we would make up the
shortfall.
(iv) HMG could relate the level at which it would step in to augment HMOCS pensions to the sterling equivalent
of the pension of equivalent grades in the UK civil
service; and
(v)
finally we should also ask the Governor whether
there is any possibility of HKG making over to HMG a
capitalised amount which would cover all HMOCS
pensions for service up to 1997. In 1983 this was
calculated to be £210 million. To make over such a
sum for a small group of expatriates in the Hong Kong
civil service would be extraordinarily devisive. It
is most unlikely that the Finance Committee would
approve such a use of the reserves. Nevertheless the
personal views of the Governor should be sought.
30. In summary I recommend that HMG should acknowledge that
the responsibility for sterling safeguards is a matter for
it but state that HMG has not yet made any decisions on what action to take if any. We would then do the minimum
necessary.
ROZAUD/12
A R Paul