TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 68

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PRIORITY CYPHER/CAT A

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RECEIVED IN REGISTRY 'No. 51

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1973

TO PRIORITY GOVERNOR HONG KONG TELNO 1135 OF 8 NOVEMBER AND TO

ROUTINE GOVERNOR BELIZE

STERLING GUARANTEES

THERE FOLLOWS BELOW THE TEXT OF A MESSAGE THE CHANCELLOR IS

SENDING TO HIS COLLEAGUES IN COMMONWEALTH COUNTRIES WHO RE

PARTICIPATING IN THE PRESENT SUARANTEE. ARRANGEMENTO:

1. AT THE MEETING OF COMMONWEALTH FINANCE MINISTERS AT DAR-ES-

SALAAM IN SEPTEMBER I MADE IT CLEAR HOW MUCH I REGRETTED THAT :

HAD NOT DEEN ABLE TO CONSULT MORE FULLY ABOUT THE EXTENSION OF THE

STERLING GUARANTEES AFTER 24 SEPTEMBER, AND PROMISED TO GET INTO TOUCH FOR THE PURPOSES OF CONSULTATION ABOUT WHAT ARRANGEMENTS ! IN REGARD TO THE STERLING BALANCES HIGHT BE APPROPRIATE. WHEN THE

PRESENT GUARANTEES EXPIRE ON 31 MARCH NEXT YEAR.

2.

I AM ACCORDINGLY NOW WRITING TO INVITE YOUR VIEWS ON THESE

MATTERS. THE GENERAL RESPONSE TO THE UK DECLARATION OF SEPTEMBER

HAS, I THINK, REFLECTED THE RECOGNITION OF OUR COMMON INTEREST IN AVOIDING DEVELOPMENTS WHICH COULD PREJUDICE HINTERNATIONAL

MONETARY STABILITY AT A TIME OF CONTINUING UNCERTAINTY, IT DOES NOT NECESSARILY FOLLOW, HOWEVER, THAT SIMILAR ARRANGEMENTS WILL

BE APPROPRIATE AFTER 31 MARCH. I MYSELF STILL HAVE A VERY OPEN · MIND ON WHAT WOULD BE BEST. THE CENTRAL QUESTION IS WHETHER A

FORMAL PATTERN OF MUTUAL OBLIGATIONS WILL CONTINUE TO BE TO THE

ADVANTAGE OF ALL OF US.

IF YOUR VIEW IS THAT IT WOULD, YOU MAY WANT

CONFIDENTIAL