Memorandum of Conversation with Secretary of State Dean Acheson, Ambassador of India Vijaya Lakshmi Pandit, Mr. B. K Nehru, T. Eliot Weil, and Philip L. Kelser

4576 sts DEPARTMENT OF STATE M.A. Memorandum of Conversation 385 DATE: Deceuber 11, 1950 SUBJECT: Pakisten Exchange Rate conf 353 PARTICIPANTS: Mademe Pandit - Apbessador of India Mr. B. K. Nehru - Finenciel Counselor, Embessy of Indie The Secretary SOA - Nr. Seil - it. Kelser COPIES TO: s/s NEA SOA E Ambassedors Terren and Henderson u. s. GOVERNMENT PRINTING OFFICE 16--61120-1 ledame Pendit told 180 sha cane at the request of her Government to sea if we would not arrange through the U. S. Director on the International Monetar, Fund to have the Fund fix 6 proper Fekisten exchenge rate. Nebru reviewed the background of the situation briefly from September 1949 when Fekisten decided not to devalue with most members of the sterling aren to the present when trade has slmost completely stopped, to the great detriment of both countries. I said it had been recom- mended that trade be allowed to flow freely for a time in order to nasiat the determination of an appropriste exchange rate and that both sides might wish to dosl directly with each other in en attempt to settle the dispute. Nr. Nehru asked why the Fund could not deal with the catter since it was woll known that the Pakisten Finance Minister, Nr. Ghules Mohanited, went to the Fund's meeting in Faris in September prepared to accept a revision in rate. Mr. Kelser explained that the rise in prices since the NATIONAL Korean aggression hed rezoved nuch of the Fund's econonie basis BOORDS for e revision and thet if it were asked to ecre to a decision SERVICE' st this tine the outcome could not be predicted. Nr. Nehru doubted if the price of jute hed yet fully adjusted itself, but Hr. Kelser maid the Pakistanis mintain that jute is as low in price now, as a result of a reduction of 25% last year and 10% this year, as if thay had reduced their exchange rate 30.5%. DECLASSIFIED It wa3 STATE Dett. LTR. 3-2-13 Authority NLT By ALL NLT Date 5-12-13