(11S281) Dd. 391599 1,500м 2/69 Hw.
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SECURITY CLASSIFICATION
Top Secret.
Seeret.
Confidential.
Restricted.
Unelassified.
PRIVACY MARKING
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CONFIDENTIAL
5-
DRAFT Brief for Mr. Moreton
Type 1 +
10
From
To:-
Telephone No. & Ext.
Department
Note for bi Mostow Мой сой
Sterling and the Sterling Agreement
At times of currency uncertainties the position
of the pound is always liable to be raised by the Hong
Kong authorities. There is still a residue of ill-
feeling as a result of devalution, while it is also
felt that the Colony was hard done by in the
negotiations leading to last summer's sterling
agreement.
Sterling Agreement
2. By an exchange of letters signed on 20 September,
1968, HMG undertook for five years (but with a review
at the end of three years) to maintain the sterling
value in terms of the US dollar of about 90% of Hong
Kong official sterling reserves provided Hong Kong maintained at all times during the agreement a minimum
of 99% of her total official reserves in sterling.
This agreement is in almost identieal terms to the
other agreements concluded with virtually all 0.S.A.
countries (although most other countries agreements
last only for three years in the first instance).
3. The Hong Kong authorities consider that their
minimum sterling proportion (m.s.p.), at 99%, is too
high. This was based on the level of sterling held at
end-June 1968; our aim in negotiating with all 0.S.A.
countries was to agree m.s.p.s on this basis and we
broadly succeeded (although in some cases concessions
/had to be
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