TNAG-0382-FCO40-428-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 57

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3.

What were the undertakings entered into by

the colonial authorities in Hong Kong in

return for the provision of exchange rate

guarantees for currency held in sterling under the Basle Agreements; and whether

these undertakings have been observed.

What discussions he has had with the

colonial authorities in Hong Kong

regarding the eligibility of the colony's reserves for exchange rate guarantee

under the current arrangements expiring

in March; and with what result.

We propose to answer briefly in the

following terms, subject to any comments you may have:

"With permission, I will take these

questions together.

The text of the 1968 Sterling Agreement with Hong Kong is set out in Cmnd 3835

of November 1968. Details of their

official reserve holdings are treated as

confidential by the Hong Kong authorities. : Nor in any case would it be appropriate for me to comment on the details of confidential arrangements with individual

official sterling holders.

Following the offer by HMG to guarantee certain official sterling balances in the six month period from 24 September, there