§ Mr. Maurice Macmillanasked the Chancellor of the Exchequer what application he has made to the International Monetary Fund for a renewal of the United Kingdom Standby Agreement which expires on 8th August; and what has been the result.
§ Mr. MaudlingAn application was made for the renewal of the Standby Agreement for a further year from 8th August, 1963, in the same amount of £357 million ($1,000 million); and this42W was agreed by the International Monetary Fund yesterday.
Our balance of payments position is healthy, and I consider that the prospects of securing expansion of the economy without inflation are encouraging. Nevertheless while expansion builds up our external position could still be affected by passing difficulties, such as changes in short-term capital flows, arising out of confidence movements or a temporary imbalance in trade. The ready availability of a drawing under the Standby Agreement will be a valuable reinforcement against such contingencies, and the existence of the Standby, on which it may well not prove necessary to draw, should of itself be a powerful factor making for the maintenance of confidence.