TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 234

HONG KONG STANDARD

11.9.73

HK sends counter-proposals to UK move on guarantee

NEW DEAL ON STERLING RESERVES

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HONGKONG yesterday sent a set of counter-proposals to London on Britain's new scheme to guarantee the Colony's sterling reserves for the next six months.

Reliable sources said last night that the Į proposals arrived at after lengthy discussions

between the Financial Secretary

Secretary Philip Haddon-Cave and other monetary advisers would reach the British Chancellor of the Exchequer later today.

Although the source did not disclose the details of Hongkong's proposals, the very fact that they have been sent shows there are vital differences between the British treasury and Hongkong.

However, it is believed that the proposals include a strong appeal to guarantee the Hongkong dollar value of the Colony's $750 million sterling reserves

against any possible fluctuations of the British currency in the coming months.

But the source said that a final agreement on the matter depends on the British response expected to reach here later this week.

The British scheme delivered to the Financial Secretary last week at the Baharin airport on his way here from London includes a six-month_guarantee. starting September 25 at the rate of US$2.42 per sterling provided the reserve holding countries continued to keep their funds at the present level.