TNAG-0448-FCO40-513-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 16

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CONFIDENTIAL

Foreign and Commonwealth Office

London S.W.1

22 July 1974

F.K. Jones, Esq.,

Treasury Chambers,

2F (RMSA)1 20/91/01

Parliament Street

SW1 P 3AG

Cam Th. Jones,

STERLING GUARANTEE

Thank you for your letter of today's date. I agree that your interpr

ation of the 1968 Sterling Agreement, read with the Declaration and the

modified settlement basis, is correct. The definitions of 'total

official external reserves' and of 'official sterling reserves' are

clearly distinct in the Sterling Agreement, and I can find nothing in

later documents to support the proposition that they subsequently becz a

inter-dependent or related in any way. I would not think that the

communications from the Bank of England to the Accountant-General o. "5

Kong on the matter constituted a governmental accurance that a contrary

interpretation would be followed, and there is no indication that the..

communications in any way induced Hong Kong to act to her detriment.

I am copying this letter to Miss Pestell.

Your micely,

CONFIDENTIAL

свен

Диза

(Mro.) E.M. Denza