TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 192

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TO PRIORITY GOVERNOR HONG KONG TELNO. 1912 OF 9 OCTOBER. 1973 189 YOUR TEL NO. 1133 : STERLING AGREEMENT,

1. WE ARE MOST GRATEFUL FOR THE ESTIMATES AND OTHER MATERIAL SET OUT IN YOUR TELEGRAM UNDER REFERENCE BUT WE ARE STILL NOT SURE THAT WE PRECISELY UNDERSTAND THE COMPLETE PICTURE. CAN YOU PLEASE GIVE FURTHER HELP THEREFORE IN FILLING IT IN?

2. WE WOULD BE GRATEFUL FOR FURTHER CLARIFICATION OF THE FIGURES IN YOUR PARAGRAPHS 1 AND 2. ARE THE ''BANKS' READY POSITIONS'' OF POUNDS STERLING 213 MILLION AT 31 AUGUST DIRECTLY COMPARABLE WITH THE POUNDS STERLING 295 MILLION ADVISED BY THE ACCOUNTANT GENERAL FOR 31 JULY? IF SO, PLEASE CONFIRM OUR UNDERSTANDING THAT THE BANKS' "'NET OVERBOUGHT POSITIONS' AT 31 AUGUST REPRESENT POUNDS STERLING 213 MILLION SPOT HOLDINGS LESS POUNDS STERLING

193 MILLION FORWARD SALES.

3. ARE WE RIGHT IN ASSUMING THAT THE POUNDS STERLING 60 MILLION NET OVERBOUGHT POSITION, ESTIMATED IN YOUR PARAGRAPH 2, REPRESENTS THE MAXIMUM AMOUNT OF STERLING THAT YOU CONSIDER THAT THE BANKS WILL STILL BE HOLDING SPOT AFTER FORWARD SALES, ESTIMATED AS AT 5 OCTOBER, HAVE MATURED.

4. IF OUR ASSUMPTION ON PARAGRAPH 3 ABOVE IS CORRECT, WE WOULD APPRECIATE YOUR VIEWS ON WHETHER THE BANKS ARE LIKELY TO SELL OFF

STILL MORE OF THEIR STERLING.

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