§ Sir C. Osborne
asked the Chancellor of the Exchequer what action he is taking 268W to protect sterling against the consequences of the French Government's conversion of its £450 million foreign currency holdings into gold; how much of this he estimates to be held in sterling; what communications he has had with the French and United States Governments on this action; and if he will make a statement.
§ Mr. Callaghan
I know of no proposal by the French Government to make such a conversion.
The Bank of France announced on 8th January that it was about to present dollars to the United States Treasury for conversion into gold to an amount equivalent to about £54 million, and that it would continue its normal monthly conversions of dollars into gold, increased as might be necessary to take account of the increase in its foreign currency reserves in the preceding month.
As the French authorities do not reveal the individual foreign currency elements in their reserves it would not be proper for me to reveal the size of the sterling element, but I can say that it is very small. Although I have had no formal communication with the French or American Governments on this subject, I am always in touch with them and other Governments on matters of mutual interest.