TNAG-0369-FCO40-415-Visit-of-Edward-Heath--UK-Prime-Minister--to-Hong-Kong--12-1-1974 — Page 42

DRAFT

PRIME MINISTER'S VISIT TO HONG KONG STERLING

Line to take To be confirmed

We are glad that a satisfactory arrangement has been

worked out to allow Hong Kong to participate in the

present six month guarantee.

w/cfo

2. We have taken no decisions yet about possible arrange-

ments for after March. We are consulting Hong Kong and

other sterling holders.

Background

sterling.

3. Hong Kong is one of the largest official holders of

In the summer of 1973, their total sterling was

of the order of £800 million, but since then the commer-

cial banks have diversified. Hong Kong's present holdings

of sterling are about £350 million.

4. Like other sterling holders, Hong Kong received at

the beginning of September the Chancellor of the Exchequer's

offer unilaterally to extend the guarantee for six months.

In order to allow Hong Kong to participate, given that the