PRIORITY
GRS 540
EN CLAIR
FROM BTC HONG KONG 0802302
UNCLASSIFIED
ORWELL
RER UN
REGISTRY No.51
¡NICKS)
TO PRIORITY FCO TEL BTC 113 OF 8 SEPT, 1973.
STERLING QUARANTEES.
1
Ente
PA
138
13:14
SOUTH CHINA MORNING POST TODAY CARRIES REPORT BY FINANCIAL EDITOR
UNDER HEADING 'TOP FINANCIAL EXPERTS BLAST UK MOVE ON RESERVES'.
IT QUOTES CHAIRMAN OF HONG KONG AND SHANGHAI BANK AS SAYING THAT
EXTENSION FOR SIX MONTHS IS 'ON THE FACE OF IT A PRETTY MISERABLE
BOX OF TRICKS' AND CLAIMS THAT THESE 'STRONG WORDS' WERE BEING
ECHOED THROUGHOUT THE FINANCIAL COMMUNITY AS IRRITATION MOUNTED
OVER ARBITRARY FASHION IN WHICH UK AUTHORITIES HAVE APPARENTLY
DECIDED TO TREAT OUR RESERVES'.
2. EXTENSION IS SAID TO BE REGARDED AS A STEP IN THE RIGHT
DIRECTION BUT WITH TWO ENORMOUS' FLAWS. FIRST, THE APPARENT LACK
OF SCOPE FOR HONG KONG TO DIVERSIFY. SECOND, THERE HAS BEEN A
REACTION CLOSE TO FURY ABOUT COMPLETE LACK OF RESPONSE FROM TREASURY
OFFICIALS TO APPROACHES BY FINANCIAL SECRETARY AND GOVERNMENT'.
!
3. ARTICLE QUESTIONS WHETHER IT IS EQUITABLE TO FIX A GUARANTEE
BASED ON RELATIONSHIP BETWEEN THE POUND AND THE US DOLLAR, AND
SAYER IS QUOTED AS SAYING THAT IT WOULD BE 'FAIRER IF ADJUSTMENT
PAYMENTS WERE BASED ON THE AGGREGATE OF HONG KONG DOLLAR TO
STERLING RATE FOR PERIOD OF EXTENSION.
14.
ANOTHER HIGHLY
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