259
HONG KONG STANDARD
Read by influential
One of two English morning newspapers.
members of the community. Circulation: 25,000.
Colony H.K. Standard, says 'yes' 16/12/73 to deál on
reserves
HONGKONG and Britain have agreed on a scheme under which Hongkong will participate
in
arrangements
of its
for the Sterling
guarantee balances during the six months until March 31.
Financial Secretary Philip Haddon-Cave said the agreement was satisfactory to both sides.
It was the result of detaile discussions extending over some months.. These concerned the unilateral offer made by the British
government September to guarantee Sterling balances at a rate of US$2.4213 to the pound from September 25 to March 31.
in
The present guarantee, Mr Haddon-Cave added, will be confined to the Government's Sterling holdings. Under the previous five-year Sterling guarantee deal the Hongkong Government brought the Sterling holdings of local banks under the umbrella of the agreement.
The exclusion of the banks from the new arrangemen'. brings the position of Hongkor into line with that of other Sterling holders and reflects the flict that the Sterling holdings of local banks are Aufficient to
inclusion.
no longer warrant their
Govt is
1/.K. Standand
urged 17/12/73 not to
'delay
Hongkong
A leading banker yesterday urged the Government not to delay in starting negotiations with " Britain on the future of the Colony's sterling reserves.
Mr Michael Sandberg,
chairman of deputy
the Hongkong and Shanghai Banking Corporation said in a television interview yesterday that negotiations must be based on the past lessons learned by Hongkong. The present guarantee runs out by the end of March.
The Hongkong banks who had also kept their reserves in sterling have already been allowed to diversify. "The banks can diversify if they wish, whereas with the Government it isn't quite so easy; there are traditional links with the UK Government, and the City of London; the Government has also been allowed to diversify somewhat.
"There is high interest rates which the Government has been able to get.
"It is sensible from the Government's and the UK Government's point of view that these diversifications take place slowly rather than hastily," said Mr Sandberg.
Л
RE: MY BTC 164. of 17 DEC 1973
With the compliments of
THE SENIOR BRITISH TRADE
COMMISSIONER
HONG KONG
H Goodfellow Esq, MKIOD, FCO Hiss H J Lackey, CRI2, UTI JH Cohen Esq, CRE2, DTI
A J Cambridge Esq, Financial Relations Dept,
17.12.73
7TH FLOOR
SHELL HOUSE
Molly neay
LA
FCO
discorred
28-x11
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