TNAG-0456-FCO40-521-Reports-and-accounts-of-Exchange-Fund-of-Hong-Kong-1974 — Page 19

U.S. dollar rate in London at noon on 4th, 5th and 6th september 1973 (US$2.4213 = £1).

£1). This offer vas con- sidered at meetings of the Executive Council held on 2nd October 1973 and 11th December 1973. At the meeting held on 11th December the axecutive Council advised that

the British Goverment should be informed that Hong Kong expects to meet the conditions of the offer. The British Goverment være so informed. The average of the repre- sentative rate in London for sterling against the U.5. doll r for the period 25th September to the 31st December 1373 vas $2.3847 to £1.

6.

Exchange Fund Chuarantee Scheme

The scheme was modified in January 1973 to over- come an accounting problem which was common to a mumber of participating banks, The main difficulty was that in Hong Kong dollar terms the value of the sterling assets which the Exchange Fund had deposited with each bank fell short of the value of the Hong Kong dollar debt certificates issued by the. Exchange Fund. To overcome this problem the sterling deposits were revalued at HK$13.56 to £1 and a new Hong Kong dollar debt certificate issued to each bank as a counterpart to the sterling deposit. A second Hong Kong dollar debt certificate vas issued to each bank in respect of the amount by which the value, in terms of Hong Kong dollars, of the sterling deposit at $13.56 to £1 fell short of the value of this sterling at $14.5454 to £1, The second certificates were interest bearing at 5% p... with affect from 1st January 1973. The rate of 13.56 vas derived from the rate of $2.40 - £1 and the prevailing central rate of HK$5.65 = US$1.

7.

The Exchange Fund Guarantee Schema expired on 24th September 1973. Over the life of the scheme receipts (interest and exchange margins) totalled £3.5 million. Payments, including interest from 1st January 1973 on the second series of Hong Kong dollar debt certificates,