LOANS FOR N.Z. URGED

Press, Volume XCV, Issue 28266, 2 May 1957, Page 10

LOANS FOR N.Z. URGED

London Comment On Fiscal Policy

(N.Z. Press Association Copyright) (Rec. 11 p.m.) LONDON, May 1 New Zealand should seek permission from the British authorities to raise new development loans on the London market, the “Financial Times” said today. Through the attraction of more capital from overseas lay the Dominion’s best hope of strengthening its payments position, the newspaper’s columnist, “Lombard,” wrote.

“And membership of the International Monetary Fund and the World Bank should be applied for,” he added.

“The latter institution has provided large sums of money for financing development to countries with far weaker cases than New Zealand.

“It is difficult to see why the Dominion should deny itself access to a supply of finance that could make a big contribution to the solution of its over-all problem.” The “Financial Times” was reviewing New Zealand’s external payments position. It said that there were still no signs of the kind of improvement the Dominion authorities apparently wanted before they would consider relaxing the stringent monetary policy introduced two years ago to deal with the foreign exchange crisis. The country was now more or less fully extended on the monetary policy front with the bank rate of 7 per cent., the columnist said.

It was in no position to call monetary weapons to its aid if external payments suffered a further deterioration. He said the attraction of overseas capital was probably the best way to strengthen New Zealand’s payments position as it was unlikely Britain could fufnish help by an arrangement for higher prices for New Zealand food products than the Dominion had been getting of late.