§ 16. Mr. Roy Jenkinsasked the Chancellor of the Exchequer to what factors he attributes the recent weakness in the sterling-dollar exchange rate.
§ Sir E. BoyleDay-to-day fluctuations in the sterling-dollar exchange rates are bound to occur, and often cannot be readily explained. My right hon. Friend sees no reason to change the assessment of our position, or of the fundamental strength of our economy, which he gave to the House on 16th June. It must, however, be borne in mind that sentiment plays an important part in the movement of the sterling-dollar rates; and that recent strikes, especially the dock strike, with their effect upon our exports have adversely affected sterling in the exchange markets.
§ Mr. JenkinsSurely the hon. Gentleman is aware that something more than day-to-day fluctuation has been going on, and that everybody has been commenting on the weakness of the official rate—not the transferable rate. Does the hon. Member think that this could be attributed to some extent to rumours of early convertibility, perhaps to a rate below that of 2 dollars 80 cents to the £?
§ Sir E. BoylePinning down rumours is extremely difficult, but I will say that there have been certain rumours recently about the possibility of some kind of devaluation; and I can only say quite categorically that there is no such intention.
§ Mr. JayIs the hon. Gentleman aware that persistent rumours of this kind on the Continent lately have done damage to the £? Could not the Chancellor of the Exchequer give an assurance that, as long as the gold reserve is as low as it is at present, no drastic step in the direction of convertibility will be taken?
§ Sir E. BoyleMy right hon. Friend has, in this House, before now laid down certain pre-conditions with regard to convertibility, and, so far as the Government are concerned, those conditions still stand quite firmly.