§ Mr. Moateasked the Chancellor of the Exchequer why there is a formal exchange rate for certain purposes between sterling and the dollar of $2.60; if he will alter the position in order to produce figures based on current exchange rates for the gold and dollar reserves and for investment dollar calculations; and if he will make a statement.
§ Mr. NottThe formal parity of the £ sterling, as declared to the International Monetary Fund, is £1=2.13281 grammes of gold. This was not changed by the 263W Government's decision, in June 1972, not to maintain agreed dealing margins on either side of parity. The sterling/dollar cross-parity, reflecting the parity for the US$ announced on 21st December 1971, was,£1=$2.60571, and on 12th February 1973, £1=$2.89524.
Different conversion rates are appropriate for different purposes. The monthly reserves announcement is given in US$ terms. Some published tables, for example, table 94 in the February issue of Financial Statistics, give the reserves totals converted at the sterling/dollar cross. parity, to give a series on a consistent basis, month by month. For other purposes, for example, balance of payments statistics, the reserves are converted on the basis of transactions rates.
Investment currency calculations are entirely a matter for the market. The effective premium calculated on the basis of the current market rate of exchange is published.