TNAG-0448-FCO40-513-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 173

DRAFT TELEGRAM TO HONG KONG

The present sterling guarantee

It appears from contact between your Accountant-General and Payton of the Bank of England that there is some difference between us on the interpretation of the accidental breach provision in para 2 of our telno 1209

of 26 November 1973.

2.

Expressed in other terms, this provision means

fively accidented

ab neither more nor less than that' a, breach at the end of

any one month will be condoned (as accidental, not there- fore detracting from eligibility for the guarantee, provided that there is no breach at the end of the

following month.

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3. We now understand that the Accountant-General has interpreted this provision differently, to mean that MG will regard a breach as accidental provided that an amount of sterling equivalent to the amount of any breach at the end of one month is purchased in the following month.