TNAG-0370-FCO40-416-Visit-of-Edward-Heath--UK-Prime-Minister--to-Hong-Kong--12-1-1973 — Page 29

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CONFIDENTIAL

THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT

PMV (HK) (74)3

14 December 1973

PRIME MINISTER'S VISIT TO HONG KONG

12th-14th JANUARY, 1974

STERLING

Line to take

Brief by II M Treasury

COFY NO

36

We are glad that a satisfactory arrangement has been worked out

to allow Hong Kong to participate in the present six-month

guarantee.

as of the UK.

2.

This is plainly in the interest of Hong Kong as well

We have taken no decisions yet about possible arrangements

for the period after March. We are consulting Hong Kong and

other sterling holders on this and aim to indicate our conclusions

in good time before expiry of the present arrangement.

Background

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

In the summer of 1973, their total sterling was of the order of

£800 million, but since then the commercial banks have diversified.

Hong Kong's present holdings of sterling are about £350 million.

4-m

In common with other sterling holders, Hong Kong received at

(CONFIDENTIAL)