TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 62

C

FP 9/551/4..

HONG KONG

DECRET

14:22

·EI.D.XXX 1128

Ubiq Konq

COMMONWEALTH OFFICE

London, S. 17,1.

30 May, 1968.

Sir,

I have the honour to confirm the arrangements which have 'been agreed between. Her Majesty's Government and your Government for the establishment of a facility whereby your Government will be enabled to acquire British Government Bonds denominated in Hong Kong dollars, subject to the conditions which are set out below.

(1) This facility will be available for a period of seven years from the date of this despatch.

́(11) · Under the facility your Government will be free

to acquire and hold such Bonds, a specimen of which is attached as an. Annex to this despatch, for amounts up to whichever is the greater of the following (a) the equivalent of £100 million; or

(b) 50% of the Colony's official assets up to a

.maximum of the equivalent of £150 million.

(iii) For the purpose of this facility, the official"

assets of the Colony shall comprise the Exchange Fund

·and other official funds held in sterling, including sterling on deposit with hanks in Hong Kong.

(iv)

The sterling equivalent of the Bond, and of any payment: in respect of interest and principal, shall be computed on the basis of the parity rates of exchange for sterling and the Hong Kong dollar, as declared to the International lionetary Fund, which are prevailing at the time of the particular transaction concerned. Where payments are due from Her Majesty's Government in Hong Kong dollars the Government of Hong Kong undertake to make such Hong Kong dollars available against sterlin as required. Alternatively, such payments may, at the option of the Hong Kong Government, be made in sterling.

/(v)

GOVERNOR,

SIR DAVID TRENCH, K.C.N.G., M.C.,

ETC..

ETC..

ETC.

SECRET