How New Zealand Would Be Affected

Chronicle (Levin), 16 September 1949, Page 5

How New Zealand Would Be Affected

The present indications were that any effect on New Zealand would be a long term one and purely that resultant from a change in the economic position in the United Kingdom, said a financial authority in Levin this morning when the cab1e from London was referred to him. "We are tied to sterling, but there is no reason as far as can be seen to assume any reversion to an exchange rate between New Zealand and England. The only immediate effect would be the repercussions in this country resulting from a change in the living standards of the population in the United Kingdom, that is if the buying canacitv of the people was restricted." It would, he added, be only reasonable to expect a lessening in the demand for our goods

from the United Kingdom, our chief market. Imports from dollar countries would cost more and they would in turn receive more for their exports. It followed, of course, -that the possibilities of trade with the United States would be brightened considerably with the prospect of an improvement in the general dollar position which, after all, was the main reason for the suggested devaluation. If sterling was devalued it would appear not altogether unlikely that the Australian Government would take the opportunity of effecting a change in the rate between their currency and sterling. At present, he added, the Australian currency was 25 per cent. below the value of sterling and anv devaluation would still further increase the cost of imports from dollar countries.