Wednesday, May 10, 1972
The question now to be decided is whether and, if so, how this
facility should be shared between Government and the banks, to which about
46 per cent of eligible sterling assets are attributable, he said.
He said that for Government owned assets to be diversified in
effect by 20 per cent or thereabouts would appear to be equitable and in
the public interest, but he proposed to consult the banks at the earliest
possible opportunity to ascertain their views before putting forward to
the Governor any final recommendation.
As regards the sterling guarantee itself, the Financial Secretary
said this relates to the sterling U.S. dollar parity in force in 1968,
and it would thus be implemented at US$2.40, in other words, on the terms
on which it was originally negotiated.
"The agreement as it stands at present expires in September 1973,
and my personal view is that moves ought to be put in hand in good time
to renegotiate the Sterling Guarantee Agreements for a further period
effective from September 1973 or earlier, and naturally I would expect the
terms of these new arrangements to reflect present day and not 1968
realities."
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