NEW ZEALAND CURRENCY TO BE DEVALUED

Chronicle (Levin), 19 September 1949, Page 5

NEW ZEALAND CURRENCY TO BE DEVALUED

WELLINGTON, Sept. 19. New Zealand would remain &t parity with sterling. which meant that our currehcy would be devalued in terms of United State dollars to the same extent as sterling, said the Minister of Finance, Mr. Nash, in a nationwide broadcast this morning iftimediate'y following the announcement by the Chancellor of the Exchequer, Sir Stafford Cripps, that s'eiiing would be deValued. Mr. Nash sai4 that as New Zealand had already reStored its currency to parity with sterling, there , was no reason to use the present j realignment of sterling with the ■ dollar as an occasion to make ahy further alteration. New Zealand, therefore, wrould remain at parity with sterling and as from tomorrow, September 20, the New Zealand pound would be worth two ( dollars and 80 cents.

. Devaluation also meant, continued Mr. Nash, that the price which the Reserve Bank will pay • fot gold will be correspondingly increased and the exact price would be announced within a few days. Mr. Nash said that the overall effect of devaluation on the internal economy of New Zealand would not • be as great as would be expected, and the effect on our price level and cost of living would not be great. As the great bulk of our trade was with the sterling area, the .effects would be absorbed without'" an appreciable affecting of our economy. To the extent that the United Kingdom benefited from devaluation New Zealand and the other countries of the British Commonwealth and sterling area would stand to benefit too. "New Zealand will continue ful1 co-operation with the United Kingdom in achieving her aims of balanced trade with dollar countries," . said Mr. Nash, who added that the banks would be asked to refrain from dealing in overseas transactions today .without the specific authority of the Reserve Bank. Without the devaluation change it would have made it difficult for New Zealand to maintain her export prices, despite price protective c]auses for two of our major products. Mr. Nash said he would mske a more detabed statement on the situation in the House of Representatives tomorrow at 2.30 p.m.