§ Mr. Severasked the Chancellor of the Exchequer whether he intends to change the basis of the valuation of the official reserves.
§ Mr. HealeyYes. I have decided that the official reserves should be revalued on 31 March 1979, and annually on 31 March thereafter. The gold in our reserves is still valued at the old official price which has been well below the market price for some time. The amendment of the relevant IMF articles last year has268W made it appropriate to review this practice, and I have decided that gold will in future be valued in dollars at the average of the London fixing prices over the three months before each 31 March, discounted by 25 per cent. Special drawing rights and foreign currencies other than dollars will be valued in dollars at the average of the exchange rates recorded by the Bank of England over the preceding three months. Most other countries value their holdings of SDRs and foreign currencies at market-related rates; Italy, France and the Netherlands also value their gold holdings at market-related rates.