AUSTRALIAN POUND

Ashburton Guardian, Volume 70, Issue 106, 17 February 1950, Page 3

AUSTRALIAN POUND

QUESTION OF REVALUATION (Rec. 9.40 a.m.) LONDON, Feb. 16. The City of London has learned with interest Mr R. G. Menzies’s statement that revaluation ‘of the Australian pound has not been before the Federal Cabinet, but it doubts whether Mr Menzies’s guarded statement will reverse or even check the flow of capital to Australia, says Reuter’s financial editor. Leading dealers in Australian securities say that revaluation will eventually be inevitable to check internal inflation caused by the high export prices of wool and wheat. Opinion in some banking quarters is that revaluation is still an open question. This, they commented, was a rough and ready method of check* ing internal inflation. Canada, Sweden and New Zealand had found that it brought some unexpected difficulties. Canada and Swederi later reversed their action. New Zealand’s foreign exchanges reserves had moved in sad contrast to Australia’s. Tens of millions of pounds of capital must have moved to Australia in recent months. Up to to-day ‘ a “rush” of British money to Australia was ■ reported, some of it into Australian internal loans. The possibility of revaluation was not Australia’s only magnet for capital. Many stockbrokers have included Australian securities amongst their favoured “hedges” against a Labour victory in the elections.