STERLING BALANCES BLOCKED.

Chronicle (Levin), 23 February 1948, Page 5

STERLING BALANCES BLOCKED.

Reeeived ^Sunday, 7 p.m. LOX1AOX, Feb. 21. Tlie British Treasury has announced that it has taken steps to block as from to-morrowf Ihifestine 's sterling bal anccs iji view of the approaehing termi nation of tlie Palestine mandate. ll was releasiag C7, (100, 00(3 fov imiuediatt requirements and £4,()00.0()0 of that s.um would be for working- balances for the Palestine banks and £1', 000,001 to meet Palestine 's current expenditure until the. middle of Ma.v. The British I'NU delegate vvould discuss the question of future releases with - the UNO Palestine Commission. Palestine 's sterling balance of about £100,000,000 had lieen drawn on rapialy. Palestine 's resources were. in danger of being unduly depleted anch the balance of payments problem of the sterling area was aggravated. The onJy way to stop the drain was to block part of the balances. This, howe.yer-, would not entirely safeguard the resources of Palestine or the- sterling area because of a likely lack pf a ^ ■ comprehensive exchange control tor the period after the mandate ends. Bri- : tain, therefore, considered it desirable that Palestine should not remain a member of the sterling area. Britain, it successor (tovernmeafs desired, would discuss the question of readmitting them to the sterling "area. The British Treasury also announced that as Palestine currency was also Transjordan currency, Transjordan currency could not remain in the sterling area. The Transjordan (lovernment said it intended to make the necess:\ry currency and exchange control arrangemeuts to e-nable it lo return to the 9terling area.