TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 211

GPC 600

AMEDIATE CYPHER/CAT A

SECRET

30

FM HONG KONG 050900Z

SECRET

ORWELL

ררי

182

186

TO IMMEDIATE FCO TELNO 1133 OF 5 OCTOBER, 1973

RECHER REGISTRY

- 8 OCT1/3

FKK

Your

YOUR TELEGRAM 983.

180

STERLING GUARANTEE.

YOUR PARAGRAPH 1 (1): WE DO NOT HAVE FIRM FIGURES OF THE ACTUAL. (READY AND FORWARD) STERLING POSITIONS OF THE COMMERCIAL BANKS ON 24 SEPTEMBER AND IT WILL BE A FEW WEEKS BEFORE WE HAVE THEIR 30 SEPTEMBER POSITIONS IN STERLING AND ALL OTHER FOREIGN CURRENCIES. BUT, AT 31 AUGUST, BANKS' READY POSITIONS IN STERLING AMOUNTED TO POUNDS STERLING 213 MILLION AND THEIR NET OVERBOUGHT POSITIONS (1.E. NET OF FORWARD SALES) AMOUNTED TO POUNDS STERLING 110 MILLION. THE TOTAL OF BANKS' DEPOSITS WITH THE EXCHANGE FUND COVERED BY THE EXCHANGE FUND GUARANTEE SCHEME WAS POUNDS STERLING 220

MILLION ON 24 SEPTEMBER.

J

2. YOUR PARAGRAPH 1 (11): WE DO NOT KNOW THE EXTENT OF BANKS' FORWARD SALES MATURING AFTER 24 SEPTEMBER, BUT WE HAAVE ESTIMATED (VERY ROUGHLY) THAT THEIR NET OVERBOUGHT POSITIONS IMMEDIATELY AFTER 24 SEPTEMBER WERE A MAXIMUM OF POUNDSS STERLING 60 MILLION (AND MAY WELL NOW BE LOWER).

3. YOUR PARAGRAPH 1 (111): AT BOOK VALUES THE GOVERNMENT'S STERLING ASSETS ON 24 SEPTEMBER AMOUNTED TO POUNDS STERLING 366 MILLION, BUT WERE REDUCED TO POUNDS STERLING 347 MILLION ON 26 SEPTEMBER AFTER MAKING COMPENSATION, PAYMENTS OF POUNDS STERLING 19 MILLION IN STERLING TO TWO BANKS UNDER THE EXCHANGE FUND GUARANTEE SCHEME.

ALL OTHER PARTICIPATING BANKS ACCEPTED PAYMENT IN HONG KONG DOLLARS), AT CURRENT MARKET VALUES THE GOVERNMENT'S STERLING ASSETS, AFTER DEDUCTION OF THESE COMPENSATION PAYMENTS, WOULD BE ROUGHLY POUNDS STERLING 320 MILLION. THE GOVERNMENT'S NON-STERLING FOREIGN ASSETS ON 24 SEPTEMBER, AT MID-MARKET PRICES ON THAT DAY,

AMOUNTED TO POUNDS STERLING 82 MILLION.

SECRET

/4. AS IT IS NOT