£10m. Rise In N.Z.’s Reserves “Seasonal”
(Speetal Correspondent N.Z.P.A.)
LONDON, May 8. The “Financial Times” commentator, Lombard, has replied to a statement by the New Zealand Finance Minister (Mr Watts), expressing surprise at the “Financial Times’s” conclusion mat there was no sign of an Improvement in the Dominion's balance of payments situation. , “The fact that the country s external reserves have risen by about £lO million since the beginning of the year doesn t disprove the assertion I made that even with the tight money policy New Zealand is not able to do much better than maintain a broad, basic equilibrium in her external accounts,” says Lombard. “Seasonal factors usually produce a substantial temporary expansion in reserves in the first half of the year. “It can hardly be denied that New Zealand’s monetary policy is
one of considerable stringency and since the rate at which a central bank provides money to the banking system—whether by rediscounting bills or by providing loans—is known as the bank rate, it is quite correct to say that New Zealand has a 7 per cent, bank rate.
“One way out of New Zealand’s difficulty would be to borrow more abroad, and Mr Watts’s statement that it is intended to raise a loan in the United Kingdom this year is encouraging. “He should now take steps to make New Zealand a member of the World Bank, so it can also have access to this important source of development capital.”
At £loom., New Zealand’s net overseas assets are about £lom. above the figure for the end of April last year, and nearly £24m above the figure for the end of December.
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Press, Volume XCV, Issue 28270, 7 May 1957, Page 18
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274£10m. Rise In N.Z.’s Reserves “Seasonal” Press, Volume XCV, Issue 28270, 7 May 1957, Page 18
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