Coll 30/224 'Currency Arrangements in the Arab Sheikhdoms of the Persian Gulf' [‎37r] (81/157)

3
£xportB oi dates to liidi&f the rupee proceeds beiii^g
reraittad to / tiwait where tuey \wei*e exchanged for
sterling*
4 # Gold held by Xx^aq aod exported to India.
^acidentally, the j ai.:ra bauiiex*b and ;iierchants coraplaiu biuterly
of the business that it by-passing thei.i through the fact that
Kuwait has no restrictions whatever on the transfer of sterling
whereas Ira<i permite sterling traiisfers only for permittted
transactions*^ It is feared in aura tuat tiie Iraq Government
will soon requisition all private holdings of sterling and
sterling secux'ities.
(IV) /unuaGO request for Conversion of rupee balance with
.ua s te rn daiiK. i >a are in *
(a) s>oon after ir»y arrival in i>anrein f tue political
itesident acquainted me with toe request of for the
conversion into dollars of their rupee balance with the eastern
Bank and informed me taat the request had oeen >assed to London
for decision. X toox early opportunity or uiscussii^ this case
with the Manager or tlie western bank, banrem, and 1 leamad
sufficient at tixat int^rviev. to suggest to the political
Kesident that no action should be tahen on request
until I was in a position to give you the facts* fhe facts
are as follows
(by Prom the 1st May, 1947» to the 30th April f 1948,
Ai^AMGO remitted to the astern bank, x>ahx*ein, ns. 88^ laxhs.
These i*upces were obtained by so it is alleged, by the
sale of dollars to official sources* To the end of ^pril, 1948 ,
they area He* 48 lakhs One lakh is equal to one hundred thousand rupees in cash and he. 33 i It -no in c. ecues
against their account leaving a balance of ,,s. 7 lakhs One lakh is equal to one hundred thousand rupees * oince
that date, by payments into -he account they nave built up
their balance to roughly fs. 40 lakhs One lakh is equal to one hundred thousand rupees . f this t lount, ..s* 13
lakhs One lakh is equal to one hundred thousand rupees will be remitted to no«ibay* .’he balance of .&• 23 laxhs
they wish converted into dollars, claiming that they have already
sold dollars for rupees Indian silver coin also widely used in the Persian Gulf. to approved dealers for more than this
amount*
(c) They have required rupees Indian silver coin also widely used in the Persian Gulf. in Dhahran where for &
time they paid their employees in rupees Indian silver coin also widely used in the Persian Gulf. and also for local
expenditure in nahrein* ^ne would, expect fre-a this that their
rupee balance in the absence of fresh remittances *ould steaaily
diminish - in if ct it aid so up to Uie end of pril, 1948*
hince trien, however, their ruppee balance tias ceeu increasing
notwithstanding the fact tnat their rupee expenditure - certainly
in aarein - uas c ^iiuued,
(d) The question arises, whence ctuae the rupees Indian silver coin also widely used in the Persian Gulf. paid
into this Bank since the end of npril 1948? It is xnown that for
a considerable period the AkiutCO issued dollar pay cheques to
its employees* ihese wex*e sold on tne Bahrein free market
for rupees Indian silver coin also widely used in the Persian Gulf. and something better the official i v ate was
obtaiimed* The' rupees Indian silver coin also widely used in the Persian Gulf. purchased by employees in tills «*ay were
then paid into their account witn who r^-sold them
dollars at i-he official aollar-rupee rate. lueratlve
practice - lucrative from the employees point of view -
continued for some months* There is no doubt that jtii bt&flftQO
accujnulated rupees Indian silver coin also widely used in the Persian Gulf. in this way and ixave paid thaa into their
account with the da stern i»ank, Bahrein* Tue ^iactice, however,
has been stop.ed* AiGiMCO does not now give dollars for rupees Indian silver coin also widely used in the Persian Gulf.
paid in by the employees.
* The cliche one hears in asra let
Kuwait is not being , ciueite , Kuwait I