Richard Luce, sq., M. LONDON.
letu algust, 1,55
Ine
have also been similar considerable fluctuations in recent years average rates (again using the Crow. Agents' monthly rates as reflooved in pension payments) have been:
Financial years:
01/02
Rate for 21 stg :
10.95
22/03 03/04
10.41
84/35
11.22
9.79
At times pensioners have benefitted from these fluctuations, but at others they have been alarmed at the sudden and unforesceable loss in the value of their pensions and the difficult, of consistent management of their
You will no doubt financial affairs in the country of their retivement. be aware that ever since 1979/80 we have been in correspondence with the Overseas Development Administration proposing that there should be some stability in the exchange rate for the payment of pensions but this has not
If these proved acceptable to any of the other parties concerned.
luctuations can occur with a British ed.inistration firmly in control, are li ely to be even more severe fluctuations nearer to 1997, not necessarily because investors, both local and overseas, may well lack confidence in the long-ter stability of Hong Kong but because of the very natural short-term uncertainty attending the inception of a totally untried and novel concept of government. Moreover, it would not be surprising if, for political reasons, the new regime was reluctant to continue to tie the Hong Kong dollar to a western currency.
there
As I pointed out in my letter of 26th October, the preservation of overseas pensions has always been included in a Public officers' Agreement and the absence of a fixed rate of exchange in the Central African. Public Officers' Agreement (Cmnd.2387), for example, has led to a devastating drop in the value of Central African pensions which are paid in Zimbabwe dollars. There is now ample time available to devise some measure for stabilising Hong Kong overseas pensions and the sooner this is done the more acceptable this should be to the Chinese Government, quite apart from reassuring pensioners themselves. One possible solution might be to use a rolling annual average (on a four-year basis, using the annual averages quoted
£1). earlier in this letter, this would be HK $10 60 =
We are available at any time to discuss this or any alternative approach to the problem, but we request most earnestly that this matter be examined in detail we before there is any risk of casting doubt on the continuing financial
trength and prosperity of Hong Kong after 1st July 1997.
cerel
USINELI