مجموعة ٣٠/ ٢٢٤ "ترتيبات العملة في المشيخات العربية في الخليج الفارسي." [و‎‎٣‎٦] (١٥٧/٧٩)

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and the Eastern Bank respectively always remind ttieir cl lent a
o£ the existence oi a ire© hard currency i.iarket v^hen soriewtiat
frivolous cases for exchange are put up to them* In Kuvmit
all applications lor hard currency arc now refused on the
grounnu tiiat tne ^nerchants can obtain all the nard currency they
need in tue i ree soarKe 1 9 while the dhcikn nos collars available
or his own and his Govenancnt’s hard cun*ency needs* The
foreign exenange applications now received by the foliticel
Agent at Kuwait are for leas difficult or soft currencies. The
Political Agent, Kuwait, endeavours to satisfy nimaelf before
issuing letters of recommendation that the imports for which
exchange is requested are for Kuwait and not lor re-shipment
to say Iraq, without proper statistics (very few of any kind
are available; it is difficult for the Political Agent to main
tain a water-tight Exchange control, but within the existing
limioptions of shortage of staff end absence oi' statistics he
is admiiiisieving exchange oontrol in Kuwait in a fft&nncr quite
satisfactory irom the rianx of j^ngland* s and Treasury point of
view* he is aware, of course, that some imports for which eoft
currency exchange has oeea provided from official sources
supposedly for Kuwait's own purposes are re-ahipped to Iraq
and although the political Agent keeps a watchful eye open for
this traffic it is quite impossible for him to stop all the leaks*
(b; The mercheats of Kuwait with whom I discussed exchange
Control, expressed themselves satisfied but inevitably asked for
hard curx^ency. this request however was not seriouiily meant:*
it ie simply that hard currency from official sources is cheaper
thanfx*ee market exchange end tuerefore if they could obtain
ofiicial currency laore profit would accrue to them* a hen
I banteringly sug ested that we.night consider meeting soae of
their <lei?tands for hard currency if they would sell us ell the
hard currency coming tueir way, they quickly veered off to
another subject.
(cj It is clear to me that tiiera is not the slightest
necessity to make hard currency available to kuv.ait either for
the Tierchants or tne Government• Kuwait is, in fact, a foreign
exchange Al borado. Aa regards Bahrein, I do not conaider tfciat
there is a case to i xcrease the amounts made available. It
may well be that the existing quota could be reduced to the
essential needs of .the Government, .f they .are so restricted
suggest it be done on tne understanding tiiat if, later, a
demand comes along for hard currency for a very exceptional
purpose, such will be net.
(d) It must not be overlooked, however, that tne supply
of free arket dollars will decline in nahrein, and to a lesser
extent to Kuwait, owing to the restrictions of production by
AidciijQ and the consequent cutting down of staff on the one hand,
and of the other by the non-replacement of staff when vacancies
occur in the Kuwait Oil damp any. xay cheques are the iain
souxxe of ioilars in the free iarketsof unrein and Kuwait.
It is impoaaible to assess this potential decline quantitatively
without knowing more about the operational prograifroes of the
Companies, particularly akA^UO•
(e> The m&ii gar of the jiuwait Braiich of the Imperial
i>ahk of Iran who is perhaps a little more advanced in his views
would lixe to see hxciiaiige control in Kuwait administered by •
the Imperial ;«ank of Iran, he makes this suggestion not
fiorely to remove one cog in the chain of control, but also to
the time of this discussion tae dollar had gone up to *e. 5
,official rate As. 3 Annas 5/ on what was alleged to be hong
Kong buying of gold in u ,ait against rupees.