XN000022-1973-07-18 — Page 8

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Wednesday, July 18, 1973

STERLING RESERVES STILL SUBSTANTIAL

Hong Kong's sterling reserves are still very substantial despite

the fact that its total external reserves have fallen from the very high

level reached in the middle of last year.

The Financial Secretary, the Hon. C.P. Haddon-Cave, said this

at the Legislative Council today in reply to a question by the Hon. P.C. Woo.

Mr. Woo asked: "In view of the uncertainties in the world monetary

situation and the expiry of the United Kingdom sterling guarantee to Hong

Kong on September 24, 1973, will government state whether re-negotiations

have already started as provided by the terms of the guarantee, and what

is the present position?"

Hr. Haddon-Cave said definitive negotiations had not yet started,

but the Hong Kong Government is in close touch with the British Government.

"I venture to say they are very well aware of our anxieties."

He said Hong Kong had been able to benefit from the arrangement

negotiated at the end of last year for the withdrawal of part of bank-owned

sterling from the Sterling Guarantee Agreement.

"We have also diversified into foreign currency assets up to the

full 11 per cent permitted under the agreement."

The Financial Secretary agreed that in view of the uncertainties of

the world monetary situation, a decision about the future of the sterling

agreements would indeed be helpful.

He assured members of the council that the Hong Kong Government is well

aware of the very great importance of these issues and is keeping the situation

under constant review.

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