TNAG-1950-FCO40-2778-Hong-Kong-Exchange-Fund-1989 — Page 89

PJYAFW

Mr Edwards

Legal Advisers

COVERING SECRET

EXCHANGE FUND ORDINANCE

.....

Reference......................

1.

I should be grateful for your comments and advice on how best to solve this delicate problem. I attach a copy of the 1987 tel referred to in para 5 together with a copy of the submission and resulting telegram to Hong Kong.

2=

I have already sent a copy of telno 804 to Miss O'Mara in the Treasury, for her comments but she has yet to respond.

HKCIOS

:/

व्हयड

15 March 1989

Armani

P J Morris

Hong Kong Department WH312

270 2653

CODE 18-77

Mr Mori

1. This came to me in Mr Edwards' absence. I should

be grateful if you

could attack a copy of the Exchange Fund Ordinance and of the Revised Editions of the Laws Ordinance.

ale

2. At first sight, this looks rather serious to me: if unsecured borrowings (which presumably ід more expensive) are

now out with the limit set by the EFO, then this means that the HKG can borrow as much as

they want,