64
GRS400
SECRET
A
DESKBY FCO 13120OZ
DESKBY PEKING 14010OZ
FM HONG KONG 13110OZ OCT 83
TO IMMEDIATE F C O
TELEGRAM NUMBER 1521 OF 13 OCTOBER
SECRET
HKK
RECEIVED IT":
10017
20 OCT 1983
INFO IMMEDIATE PEKING (PERSONAL FOR AMBASSADOR)
FOLLOWING STRICTLY PERSONAL FOR CLIFT (HKD)
MY TELNO 1501 (NOT TO PEKING)
STABILISATION OF THE EXCHANGE RATE
DESK OFFICER
PA
TRY
tion Taken
EXECUTIVE COUNCIL ACCEPTED TH16 MORNING (IF SOMEWHAT PASSIVELY)
THAT THE PROPOSED STABILISATION SCHEME SHOULD BE IMPLEMENTED FROM
MONDAY, OCTOBER 17: AND THAT AN ANNOUNCEMENT SHOULD BE MADE AT
12 NOON HONG KONG TIME ON SATURDAY OCTOBER 15.
Redacted under FOI exemption section 27(1)
3. THE TEXT OF THE FINANCIAL SECRETARY'S STATEMENT WHICH WILL BE MADE ON SATURDAY IS IN M...F.T.
4.
HAVE APPROVED THE IMPLEMENTATION OF THE SCHEME FOR THE REASONS SET OUT IN PARA 28 OF THE MEMORANDUM. ALTHOUGH THE RISKS ARE APPARENT CONSIDER THAT THERE ARE FAR GREATER RISKS IN INACTION. OVER THE PAST YEAR THERE HAS BEEN A SERIES OF DOWNWARD LURCHES IN THE DOLLAR RATE AND THE LAST ONE BROUGHT WITH IT ''A WHIFF OF PANIC'. IF ANXIETY BUILDS UP AROUND NEXT WEEKS TALKS AS IT DID ON 23 SEPTEMBER AND/OR THE CHINESE FAIL TO AGREE TO AN ENCOURAGING COMMUNIQUE THERE COULD BE ANOTHER SEVERE AND POSSIBLY IRREVERSIBLE SLIDE IN THE EXCHANGE RATE. IT COULD WELL BE THAT IT IS ONLY BEING HELD NOW BY THE EXPECTION IN THE MARKET THAT THE GOVERNMENT
S ABOUT TO COME UP WITH A PLAN. IN ANY CASE THERE REMAINS THE REAL RISK THAT WE SHALL PEACH ANOTHER IMPASSE WITH THE CHINESE SOMEWHERE ALONG THE LINE:. AND ALL THE EXPERT ADVICE IS TO THE
EFFECT THAT IT IS BETTER TO ACT WHEN THE RATS IS RELATIVELY STATIC THAN WHEN IT IS FALLING.
SECRET
/5. I SHALL
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