NEW LOANS FROM LONDON

Press, Volume XCV, Issue 28267, 3 May 1957, Page 8

NEW LOANS FROM LONDON

N.Z. “ Considering ” Move (New Zealand Press Association) WELLINGTON, May 2. The Government is considering the possibility, of going on the United Kingdom loan market this year. The Minister of Finance (Mr J. T. Watts) said today, when commenting on a cablegram quoting a columnist in the “Financial Times” who urged that New Zealand should seek permission from the British authorities to raise new development loans on the London market. Mr Watts said that the Government had raised £35.000.000 on the United Kingdom market for urgent development purposes in the last four years. y He said he was rather surprised to read the suggestion in the same report that there were no signs of improvement in New Zealand’s balance of payments situation.

“New Zealands’ overseas funds have now reached £100,000,000 — £10,000,000 in advance of the figure at the end of last year: and I am reasonably satisfied with the progress being made in this direction,” said Mr Watts. “Nor do I consider that the monetary policy followed over the past few years has been a ‘stringent’ one. We have a policy of restraint and over the past two years we have slowly, but steadily, reduced bank overdrafts, but our policy has been a milder and steadier one than those of many other countries. “It is also incorrect to suggest that the bank rate is 7 per cent. The average rate charged on bank overdrafts is 5 per cent., but where trading banks find it necessary to borrow from the Reserve Bank, they have been charged 7 per cent, for this purpose,” said Mr Watts.