TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 43

GRPS 700

IMMEDIATE

EN CLAIR

AND BY BAG

FROM FOREIGN AND COMMONWEALTH OFFICE 0216052

UNCLASSIFIED

PA

TO IMMEDIATE CERTAIN POSTS AND MISSIONS GUIDANCE TELNO. 118 OF

2 AUGUST 1973.

U.K. RESERVES IN JULY 1973.

65

ری

1. THE TREASURY ANNOUNCED TODAY THAT AFTER RECEIPTS OF DOLLARS 300 MILLION FROM PUBLIC SECTOR FOREIGN CURRENCY BORROWING THE U.K. OFFICIAL RESERVES FELL BY DOLLARS 385 MILLION DURING JULY TO STAND AT DOLLARS 6,628 MILLION AT THE END OF THE MONTH. THE RESERVES MAY BE USED NOT ONLY FOR MARKET INTERVENTION IN SUPPORT OF THE STERLING EXCHANGE RATE BUT TO COVER FOREIGN EXPENDITURE BY GOVERNMENT DEPARTMENTS, WHICH VARIES CONSIDERABLY FROM MONTH TO MONTH,

AND TRANSACTIONS WITH OTHER CENTRAL BANKS,

2. INSTRUCTIONS FOR USE.

YOU MAY DRAW FREELY ON THE WHOLE OF THIS GUIDANCE TELEGRAM, BUT

PARAGRAPHS 6 AND 7 ARE FOR USE AS NECESSARY ON AN UNATTRIBUTABLE

BASIS.

3. SUPPLEMENTARY INFORMATION.

OF THE FICURES MENTIONED IN THE ANNOUNCEMENT DOLLARS 330 MILLION, DOLLARS 385 MILLION AND DOLLARS 6,628 MILLION ARE RESPECTIVELY EQUIVALENT (IN ROUND TERMS) TO POUNDS STERLING 104 MILLION, POUNDS STERLING 133 MILLION AND POUNDS STERLING 2,289 MILLION IF

CONVERTED AT THE PARITY RATE OF £1 = DOLLARS 2.89524 OR POUNDS. STERLING 119 MILLION, POUNF STERLING 153 MILLICH AND POUNDS STERLING 2,632 MILLION IF CONVERTED AT THE CLOSING MARKET RATE ON

31 JULY OF £1 = DOLLARS 7.5135,

4. DURING JULY EXCHANGE RATES FOR U.S. DOLLARS HERE AND ON THE

CONTINENT FLUCTUATED CONSIDERABLY, THE SPOT RATE FOR STERLING OPENED

THE MONTH AT 2.5825. BY THE END OF THE FIRST WEEK IT HAD FALLEN 70

AROUND 2.5550. DURING MUCH OF THE REMAINDER OF THE MONTH IT

FLUCTUATED WIDELY AROUND 2.5375 BEFORE FALLING SHARPLY TOWARDS THE

END OF THE MONTH TO REACH A LOW POINT OF 2.4700 ON 26 JULY, THE

RATE SUBSEQUENTLY RECOVERED AND AT THE CLOSE ON 31 JULY WAS 2.5185.

/5.THROUGHOUT