TNAG-0449-FCO40-514-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 33

CONFIDENTIAL

5. For what it is worth, my opinion on this is that the phase"and which are included in total official external reserves" excludes the possibility of inclusion in OSR of sterling holdings which are not included in TOER, but does not exclude from TOER sterling holdings which are not included in OSR. In a nutshell, is this a symmetrical view of the relationship correct and sustainable, or not?

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6. I would be most grateful if you would have this question reconsidered by your legal advisers and for any further FCO views on this: for convenience, and to save time, I am enclosing a spare set of the documents.

Yours sincerely,

By waver

D A WALKER