§ 19. Mr. Bruce-Gardyneasked the Chancellor of the Exchequer whether the United States Treasury has yet taken advantage of its £83 million drawing on the International Monetary Fund to repay short-term indebtedness to the Bank of England.
§ Mr. BarberThere is some misunderstanding implied in my hon. Friend's Question. The United States has not incurred any short-term indebtness to the Bank of England. My hon. Friend may have in mind the outstanding swap transaction, but this is not a debt.
§ Mr. Bruce-GardyneEven if the sums involved relate to the swap transaction, was there not a clear understanding at the time of this settlement at the beginning of May that the United States would use its drawing to repurchase surplus dollars in United Kingdom accounts? Is it not somewhat unsatisfactory if this understanding is not to be honoured?
§ Mr. BarberThe mechanics of the Federal Reserve Bank's drawing on the reciprocal swap facility are of a highly technical nature, but, briefly, the effect was to increase forward liabilities on both sides and to give the United Kingdom an exchange guarantee against dollar devaluation. My hon. Friend refers in his Question to a drawing of £83 million. As part of the arrangements for the repayment of the whole of the United Kingdom's outstanding debt to the International Monetary Fund, the United States made a drawing in sterling from the IMF equivalent to £83 million.
§ Mr. LiptonIs the right hon. Gentleman aware that the epoch-making announcement which he has just made will be warmly welcomed by all the widows, orphans, sick and unemployed in this country?