TNAG-0380-FCO40-426-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 112

PRESS NOTICE

STERLING AGREEMENTS

1.

The present Sterling Agreements expire on 24 September.

These have provided a valuable element of stability in the

international monetary scene and HMG considers it to be in the

interest of all that this stabilising element be continued for

a further period. But there is still uncertainty about

developments in international monetary affairs, and it would

not be sensible at present to seek to work out substantive

arrangements for a long period ahead. HMG has accordingly

decided to continue for six months to guarantee certain official

sterling reserves.

2.

A message has been sent to the participants informing them

of this. The guarantee will be given in the form of a Government

declaration which is being sent to signatories of Sterling

Agreements now in force. Signatories will be covered by the

guarantee provided that they throughout the period of the

declaration broadly maintain their sterling holdings at present

levels.

3. The guarantee is given at $2.4213. The guarantee will be

implemented if the average of daily rates for sterling in terms

of US dollars throughout the six month period is below the

guarantee rate. Settlement would be in sterling and the amount

would be calculated as the sum necessary to restore the value of

eligible balances calculated at the average rate to their value

calculated at the guarantee rate.