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Wednesday, 12 April 1972
Page: 1489

Mr GRAHAM (NORTH SYDNEY, NEW SOUTH WALES) - I address a question to the Treasurer. In view of the long-standing financial ties between Australia and Great Britain, has the British undertaking to the

European Economic Community to consider modifying the role of sterling as a reserve currency after the British entry into the European Economic Community caused the Treasurer any concern? How will any such move affect the future of Australia's international reserves, a large portion of which are invested in British securities? Further, will the Treasurer comment upon the effect upon British investment within Australia?

Mr SNEDDEN (BRUCE, VICTORIA) (Treasurer) - The British Government has said that on accession to the European Economic Community it is prepared to consider a gradual and orderly rundown of official sterling balances. How rapid that will be is not yet known. The British Government no doubt is considering that at present. What the British Government has said is that it will consult with all holders of sterling. It has said further that it will do nothing without the approval of the sterling holders. Australia, for its part, is very glad to have this assurance for, after all, we are probably the largest holder of sterling. We have $1.5 billion in official reserves. 1 will be in London next week and I have arranged to meet the Chancellor of the Exchequer. This is one of the matters I will be discussing with him. Also I will be discussing with him the other portion of the question, namely, the effect this may have upon British investment in Australia.

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