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Wednesday, 20 March 1968

Mr MCMAHON (LOWE, NEW SOUTH WALES) (Treasurer) - It is true, as the honourable member said, that at the last meeting of the International Monetary Fund in Rio De Janeiro a decision was taken, with only one nation conditionally agreeing, that a new international currency be established and that it be called a drawing right. It was also decided that the administrative arrangements should be left in the hands of an executive committee to work out ways and means by which this new drawing right could be brought into existence. I have had some doubts until recent months as to whether there was any real prospect of an agreement being reached at the September meeting of the IMF this year so that the money, or the international currency, could actually be created some time in 1969.

In the communique recently issued as a result of the Washington meeting it was stated that the existing holding of gold, together with the prospect of creating this new currency, meant that it was no longer necessary for the international authorities to buy and sell gold in the market. There has also been a very favourable statement - an optimistic statement - made by Sir Leslie O'Brien, the Governor of the Bank of England, the reserve bank in the United Kingdom, in which he expressed the hope that very shortly the executive committee will be able to make recommendations for submission to the Fund at its September meeting. Sir Leslie also has the hope - and he is very close to the centre of this problem - that this new international currency will be brought into being some time in 1969.

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