LOAN RATE RAISED

Press, Volume CV, Issue 31007, 12 March 1966, Page 18

LOAN RATE RAISED

U.S. Minimum At 51 p.c.

(N.Z. ‘ Press Assn.—Copyright)

NEW YORK, March 10

Major banks increased their minimum lending rate from 5 per cent to 51 per cent today. the Associated Press reported. Morgan Guaranty Trust Company, of New York, initiated the boost. It was quickly followed by Banders Trust Company, New York, and Mellon National Bank Trust Company, of Pittsburgh.

Mr T Gates, chairman, and Mr J. Myer Jr., president of Morgan Guaranty, said the increase was “the result of disparities existing between commercial banks and other credit market rates, and of a continuing increase in loan demand.” The stock market started losing ground immediately after the announcements.

The most recent previous increase in the prime rate to 5 per cent from 41 per cent came on December 6. a day after the Federal Reserve Board increased to 4i per cent from 4 per cent its discount rate—the Federal Reserve Bank’s charge for loans to member commercial banks? The Treasury declined to comment on the increase.

N.Z. Reserves £54.8m.

(N.Z. Press Association)

WELLINGTON, March 11. Net overseas assets of the j New Zealand banking systeml on March 2 were £54.8m, compared with £52.4m on February 23 and £65.6m on March 3, 1965. These figures were announ-1 ced by the Reserve Bank today.