UK: sterling reserves

This file relates to the financial crisis of sterling and its impact in Kuwait on the financial and banking system. It contains correspondence concerning:

• Devaluation of sterling and Kuwaiti reaction and concern about the value of its reserves; the letter from the Chancellor of the Exchequer to the Ruler of Kuwait Sheikh Sabah Al Salem Al Sabah on the reasoning behind devaluation; and approaches from the Kuwait Minister for Finance and Oil Abdul Rahman Al Atiqi to HMG over the possibility of compensation for Kuwait’s financial losses
• Sterling holdings of all of Kuwait’s major banks and financial companies, including: the British Bank of the Middle East (BBME), the National Bank of Kuwait, the Commercial Bank of Kuwait, the Gulf Bank, the Kuwaiti Investment Company, and the Kuwait Foreign Trading, Contracting and Investment Company; and the possible plans of some of these banks and companies to obtain a banking licence in Switzerland
• Discussions on the future of BBME’s concession in Kuwait, which expires in 1971
• Discussions on reports of the movement of funds by Kuwait to Paris; the transfer of dinars to francs; and articles in the Washington Post on France’s expanding influence in Kuwait
• Request by the Kuwaiti Ambassador for a record of the former Chancellor of the Exchequer James Callaghan’s discussion on sterling devaluation with the Treasury
• Call of the Kuwaiti Ambassador on the Foreign Secretary George Brown to discuss the sterling crisis
• Report from G G Arthur of HM Embassy in Kuwait to the Foreign Secretary on the financial situation in Kuwait
• Question of Kuwaiti gold purchases
• Conversation with Eugene Black over the dissatisfaction with the Kuwait Advisory Council
• Question of sterling interest and exchange rates; and the efforts of the Kuwait Government to diversify its sterling reserves, and possibly exchange some for dinars
• Kuwaiti plans for a central bank; an article on this in the Financial Times; and the passage of a bill concerning this in the Kuwait General Assembly
• Parliamentary question from Robert Cant MP to the Chancellor of the Exchequer on the Kuwait Government and sterling reserves
• Comparisons of the situation in Kuwait with the situation of sterling in Hong Kong