§ Mr. Parkinsonasked the Chancellor of the Exchequer what is the total sterling obligation at the currently ruling exchange rate arising from guarantees to certain categories of overseas depositors of sterling.
§ Mr. NottIn view of the movements in the sterling exchange rates in the last week or so, and the resulting interest in their effect on the sterling agreements, I think it right to give to the House an explanation of the basic arrangements for implementation of the guarantee, details of which have remained confidential since the agreements were first concluded in 1968. No obligation has yet been incurred. The guarantee is to be implemented if the middle sterling/United States dollar rate falls and remains throughout a period of 30 consecutive days below 2.3760 dollars—that is, 1 per cent. below 2.40 dollars which was the parity at the time when the agreements were concluded. The guarantee applies to sterling belances defined as eligible in the agreement with each country. It provides that a payment or credit will be made in sterling to the account of the Government or central bank concerned of the amount which makes good in dollar terms the difference between 2.40 dollars and the closing middle sterling/United States dollar rate in London on the last working day of the 30-day period referred to. Any such payments will be made from the Exchange Equalisation Account.