TNAG-0380-FCO40-426-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 196

REPORTS IN TODAYS (12TH) PRESS OF CONCLUSION OF TALKS SAY HONG KONG IS BELIEVED TO HAVE PUT HEAVY PRESSURE ON BRITAIN TO MAKE

CLEAR ITS INTENTIONS ON FUTURE MANAGEMENT OF STERLING RESERVES

AND THAT PROPOSALS ARE EXPECTED TO BE MADE KNOWN IN FIRST HALF OF

NEXT MONTH. OBSERVERS ARE SAID TO ''SENSE THAT HONG KONG

DELEGATES ARE SOMEWHAT AGGRIEVED AT THE APPARENT LACK OF PROGRESS''.

HADDON-CAVE IS QUOTED AS HAVING CONFINED HIMSELF TO SAYING THAT

AN AGREEMENT IS ''A MATTER OF CRITICAL IMPORTANCE TO HONG KONG.....

WE ARE HISTORICALLY LOCKED INTO STERLING. WE ARE EXTREMELY VULNER-

ABLE BECAUSE OUR RESERVES ARE TO CONCENTRATED. UPON STERLING,

PRESENTING A VERY CONSIDERABLE EXCHANGE RISK,"

FCO PASS COPY TO FINLAYSON (EPD) AND MISS LACKEY (CREE2) (DTI)

ASTON

FILE S:

HEAD OF HKIOD

HEAD OF FRD HEAD OF EFD PS/MIR. ROYLE SIR E. NORRIS

COPIES TO:

MISS LACKEY, CRE 2, DTI.

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