TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 6

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

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HONG KONG STERLING AGREEMENT

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A.

7 AUG 1973

17150

MF9/393/1

76

A provisional arrangement has been made for the Governor of Hong Kong and his Financial Secretary to see the Minister of State on Thursday, 9 August. He will probably not be seeing

un FCO Minister. The visit has been arranged at the Governor's own urgent request to discuss the future of the sterling agreement as it applies to Hong Kong.

2.

This question is whether some special arrangement should be offered to Hong Kong at this juncture. The recommendation in this submission is that it should not be, and a speaking

line is offered.

Bberlite Agreements - present situation

3. The present sterling agreements with all countries expire on 24 September. No decision has yet been taken on whether they are to lapse completely or be renewed. Ministers have decided Lo seek to defuse the importance of the date of 24 September by

The Chancellor opening un discussion with the signatory countries. has sent a message in general terms, asking for their views and promising to write again before the meeting of Commonwealth Finance Ministers in Dar-es-Salaam on 19 and 20 September. The plan is that a further letter will be sent as soon as possible after the Chancellor returns from holiday on 24 August, with a view to giving the Commonwealth Finance Ministers time to have formed a preliminary view before the Dar-es-Salaam meeting. (Not all signatory countries are in the Commonwealth.)

A.

At present we do not know what the further letter will say. Officials are likely to recommend that the United Kingdom should offer to continue a US dollar value guarantee for a limited period of, say, six months. The UK would, by unilateral declaration, guarantee the balances of those sterling holders who chose to maintain their existing minimum sterling proportions (isp). But the exchange rate to which the offer of a guarantee would apply would have to be determined: it could be a market

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