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Wednesday, August 2, 1972
HONG KONG'S STERLING RESERVES
The Financial Secretary, the Hon. C.P. Haddon-Cave, said today he
hoped a further and conclusive round of talks between the Hong Kong and British
Government would be held very soon either in Hong Kong or in London regarding
the situation created by the floating of sterling.
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He was speaking in the Legislative Council in reply to the Hon. P.C.
Woo who had asked for a statement from the Government on Hong Kong's Sterling
Guarantee Agreement with the United Kingdom.
Mr. Haddon-Cave said that during the four-day discussions here last
month, the Government and two British officials from London discussed and exchanged
ideas on all aspects of the situation created by the floating of sterling.
"These exchanges could naturally not be expected to lead at that stage
to firm conclusions for both sides had to listen and then reflect, but we
have kept in touch with London since the British officials departed," he said.
In exchanges with London, he said, the Government had emphasised
most strongly that Hong Kong's position as a large holder of sterling balances
as well as her traditional links with sterling deserved special consideration,
The Financial Secretary described the future of the Hong Kong dollar
and the security of the exchange value of Hong Kong's external reserves as
"complicated and delicate questions," but he assured the Council that the
Government was very conscious of the fundamental importance of arriving at
the right answers to these questions.
He said the floating of sterling and the subsequent establishment
of a temporary link between the Hong Kong dollar and the U.S. dollar had
created two difficulties for Hong Kong in relation to her Sterling Guarantee
Agreement with the United Kingdom.
/The