TNAG-0448-FCO40-513-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 202

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CONFIDENTIAL

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P/s Lady Tweeds... P/S R.U.S.

Mr WRIGHT/Mi Mh Youpe SWP)

25-1 Treasury Chambers, Parliament Street, SW1P 3AG

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before the elections PRIME MINISTER

RiA. huon w/r

01-930 1234

RECEIVED IN

REGISTRY No: 51 26 FEB 1974

НКК

10.

Economists

zi

HKI OD 16

19/2.

SWED

The Xx

OFFICIAL STERLING BALANCES

In my minute of 7th January about the balance of

payments and the exchange rate in 1974, I said that I

should be arranging for very quick discussions with

Australia and New Zealand to see whether we might manage

to contain their diversification out of sterling within

acceptable limits without a guarantee after the present

one expires on 31st March.

2. The officials' talks were friendly, and the

Australians and New Zealanders were very understanding

of our problems. But in the present uncertainties they

were most reluctant to commit themselves to a specific

programme of diversification over say a 2 to 3 year

period.

3. We now have to make our minds up and inform the

participants in the present guarantee of our decision.

quickly. We cannot safely leave this until after the

CONFIDENTIAL

/Election