TNAG-0375-FCO40-421-Discussions-with-Sir-Murray-MacLehose--Governor-of-Hong-Kong-1973 — Page 11

SECRET

RECORD OF A MEETING AT THE TREASURY

AT 11.30 AM ON FRIDAY 14 SEPTEMBER 1973

ва

2

Present:

Mrs M E Hedley-Miller

Mr D G Holland

Mr AC Stuart

308

Sir Murray MacLehose

KCMG MBE

(42)

alf

HKK) 1/144

STERLING AND HONG KONG

For

1. Sir Murray MacLehose described the Hong Kong position.

They needed a programme of phased diversification.

political and other reasons there was a very strong case for

wider rights. So long as losses to Hong Kong's reserves

resulted from an agreement with HMG, this obscured objective

consideration of the reasons for the loss. Politically, a

self-induced loss would be easier to sustain. From Hong Kong's

point of view there was not a good commercial case for retaining

so large a proportion of their reserves in sterling. The speed

at which diversification should happen was a separate issue

but it would be Hong Kong's objective from now on.

2. Sir Murray MacLehose said that the Treasury's recent

unilateral offer of a six-month guarantee was framed in a way

which made it difficult to say yes or no.

Discussions would

be necessary to clarify the implications.

He asked for an

assurance that there would be time for thorough discussions

between Treasury officials and the Hong Kong Financial Secretary,

Mr Haddon-Cave, during the Commonwealth Finance Ministers

Meeting in Dar-es-Salaam.

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