TNAG-0448-FCO40-513-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 180

PRENTCIRCUMSTANCES THAN THE RATE IN TERMS OF ANY SINGLE CURRENCY.

THE EFFECTIVE EXCHANGE RATE IS A MEASURE WHICH TAKES INTO

ACCOUNT THE MOVEMENT OF STERLING, AGAINST THE NAJOR CURRENCIES.

THE PETHOD HVOLVES CALCUTATING A WEIGHTED AVERAGE OF THE EXCHANGE

CATE CF STERLING AGAINST OTHER CURRENCIES.

7. THE GUARANTEE IS GIVEN AT THE AVERAGE EFFECTIVE RATE IN THE

PRESENT SIMX-MONTH GUARANTEE FRICD AND WILL BE IMPLEMENTED IF

THE AVERAGE EFFECTIVE RATE IN THE NINE-MCHTH PERIOD OF THE NEW

GUARANTEE IS BELOW THE GUARANTEE RATE. ANY SETTLEMENT

WOULD BE ! STEFLING AND WOULD BE CALCULATED AS THE SUM NECESSARY

TO FESTORE THE VALUE OF ELIGIBLE BALANCES CALCULATED AT THE

IMPLEKSITATION RATE TO THEIR VALUE CALCULATED AT THE QUARANTEE

RATE.

→

8.

TO QUALIFY FOR THE GUARANTEE, RECIPIENTS OF THE DECLARATION

MUST KEEP IN THEIR RESERVES AN AMOUNT EQUAL TO THE LOWEST CF

THE FOLLOWING: -

(A) THE AMOUNT NECESSARY TO MAINTAIN MINIMUM STEFLING PROPORTIONS

( THE LEVELS OF WHICH WERE FIXED IN 1968 AT BROADLY THE AMOUNT WHICH

ACTUAL STEFLING HOLDINGS THEN FEPRESENTED, BUT WERE REDUCED ALL

ROUND BY 10 FER CENT IN 1971 AND ARE BEING FURTHER REDUCED BY

10 PER CENT UNDER THE NEW DECLARATION): OF

(B) THE AMOUNT DERIVED BY APPLYING THE MSP TO TOTAL OFFICIAL

EXTERNAL RESERVES HELD ON 24 SEPTEMBER 1973: CR

(C) THE AMOUNT DERIVED BY AFFLYING THE MSP TO TOTAL OFFICIAL

EXTERNAL RESERVES HELD ON THE LAST WORKING DAY OF MARCH 1974.

/THIS PROVISION,

- 3 3-

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