SECRET
FM HONG KONG
TO IMMEDIATE FCO
TELNO 373
OF 10115OZ FEBRUARY 92
SECRET
34
100430
DHIAN 2458
TOP CORY Q DIST?
Мисв
Mar 2011
INFO IMMEDIATE PEKING, UKREP JLG HONG KONG
m
PERSONAL
PEKING:
FOR RICKETTS, HKD.
PERSONAL FOR AMBASSADOR
UKREP JLG: PERSONAL FOR GALSWORTHY
30
OUR TEL 358: CONFIDENTIAL FINANCIAL DIALOGUE: DISCLOSURE OF INFORMATION ON EXCHANGE FUND.
THE FOLLOWING IS THE TEXT OF THE DRAFT SPEAKING NOTE ON EXCHANGE FUND FOR USE AT THE NEXT MEETING WITH THE CHINESE:
QUOTE: THE CHINESE SIDE MAY WISH TO BE AWARE THAT HKG INTENDS TO PUBLISH, ON AN ANNUAL BASIS, A SIMPLE STATEMENT OF THE AUDITED ACCOUNTS OF THE EXCHANGE FUND.
THERE ARE A NUMBER OF FACTORS LEADING TO HKG'S DECISION THAT IT WOULD NO LONGER BE APPROPRIATE TO MAINTAIN SECRECY OVER THE SIZE OF THE EXCHANGE FUND. THE ARGUMENTS IN SUPPORT OF
DISCLOSURE ARE:
(A) DISCLOSURE OF INFORMATION CONCERNING THE OVERALL SIZE OF THE FUND, THE AMOUNT OF FOREIGN CURRENCY RESERVES HELD AND THE NET ASSET VALUE OF THE FUND WILL HELP DEMONSTRATE HONG KONG'S
FINANCIAL STRENGTH:
(B) IT WILL ENABLE PROSPECTIVE LENDERS INVOLVED IN THE FINANCING OF THE VARIOUS INFRASTRUCTURAL PROJECTS AND THE VARIOUS CREDIT
AGENCIES TO MAKE A MORE OBJECTIVE ASSESSMENT OF THE CREDIT- WORTHINESS OF HONG KONG:
(C) WITH MONETARY MANAGEMENT CONSIDERABLY STRENGTHENED OVER THE PAST FEW YEARS, THERE IS CONSIDERED TO BE LITTLE RISK OF UNINFORMED INTERPRETATION OF FIGURES RELATING TO THE FUND INHIBITING THE EFFECTIVENESS OF MONETARY MANAGEMENT IN HONG KONG:
(D) THE SIZE OF THE FUND, IF PUBLICLY DISCLOSED, IS LIKELY TO BOOST CONFIDENCE IN THE CURRENCY:
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