asked the Chancellor of the Exchequer what is his latest estimate of the total amount involved in the switch from sterling to foreign currency financing for trade between non-British ports; and how much of this has already taken place.
, pursuant to his reply [Official Report, 28th March 1977; Vol. 929, c. 39], gave the following information:The once-for-all inflow associated with the November prohibition on the provision of sterling for the finance of third country trade is likely to be substantially greater than the original estimate of £½ billion. It has probably been one important factor underlying the exceptional demand for sterling in recent months. However, it is not possible to make precise estimates of the total sums involved, or of the extent to which loans will be switched into foreign currency. Statistics for the fourth quarter of 1976 suggest that repayment of sterling loans made by United Kingdom banks may have begun before Christmas, though the impact of the November measures on sterling finance provided by United Kingdom merchants cannot be identified from the balance of payments accounts. Detailed information on external capital flows in the current quarter is not yet available.