HC Deb 07 December 1950 vol 482 cc79-80W
Mr. Houghton

asked the Chancellor of the Exchequer what conclusion was reached in his recent discussions with the Ceylon Minister of Finance about the provision of a gold reserve for the new Central Bank of Ceylon.

Mr. Gaitskell

In the course of these discussions the Ceylon Minister of Finance proposed that in order to provide an adequate reserve of gold and dollars Ceylon should retain for the present a percentage of her net dollar earnings until a limit was reached of one-half of the international reserve of the Central Bank which has recently been established in Ceylon. The United Kingdom Government for their part put forward the alternative proposal that a sum in gold or dollars should be set aside immediately out of the central gold and dollar reserves in order to provide the Central Bank with a gold reserve relatively as favourable as the corresponding reserves of the Central Banks of the other independent members of the sterling area dollar pool. The sum to be so set aside would be the equivalent of £4 million. The Government of Ceylon have accepted this proposal on the understanding that, after experience has been gained of the arrangements which have recently been made between the Bank of England and the Central Bank of Ceylon regarding dollar cover, there would, if necessary, be further consultation about the disposition of Ceylon's net surplus of dollars on current account.

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