HC Deb 28 July 1983 vol 46 cc527-9W
Mr. Austin Mitchell

asked the Chancellor of the Exchequer what is the increase in the overseas sector foreign currency deposits since the suspension of exchange of the Board of Inland Revenue showing in respect of each (a) date of birth, (b) date of appointment, (c) professional qualification, (d) previous appointment in the public service, (e) material experience outside the public service and (f) salary.

The Prime Minister

'The information is as follows:

control in cash terms and as a percentage; what has been the effect on (i) the liquidity of the banking system in the United Kingdom, (ii) interest rates and (iii) the exchange rate.

Mr. Ridley

The increase in foreign currency deposits held by the overseas sector between 1979Q3 and 1983Q1 valued in sterling allowing for revaluations due to fluctuations in exchange rates is £185.6 billion and the percentage increase is 153 per cent.

The increase in overseas foreign currency deposits, which reflects the role of London as an international financial centre, was nearly completely offset by an increase in foreign currency lending abroad. The effect on the liquidity of the banking system, interest rates and the exchange rate is likely to have been modest. More generally it is not usually possible to say what the financial effect of any individual balance of payments flow will be nor is it always clear to what extent the net foreign currency liabilities of the banking system represent autonomous behaviour by the banks and to what extent they are a compensatory financing item for other structural flows in the balance of payments.

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