4.
Suggestion in your telegram No.1152 for
borrowing from Exchange Fund has been very
carefully considered in light of paragraphs 2 and
3 of your telegram. In present circumstances,
however, any recourse to the Exchange Fund, which
could only mean a reduction in the sterling securities
which the Fund would otherwise hold, would have
precisely the same effect on general sterling position
as direct borrowing in the London market. I am
satisfied therefore that it would be undesirable to
pursue this proposal at present.
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