BANK EXCHANGE RATES

Dominion, Volume 7, Issue 2260, 21 September 1914, Page 7

BANK EXCHANGE RATES

UNIFORM INCREASE DUE TO ABNORMAL CONDITIONS. A telegram from Now Plymouth appearing in The Dominion on Saturday stated that at a- meeting of tho New Plymouth Harbour Board the chairman protested against tho increase in the bank rate of exchange on London from l-Bth per cent, to 6-Sfclis per cent. It was decided at tho meeting to call the attention of tho Prime Minister to the action of the Bank of New Zealand iii this matter. Tho telegram was brought under the notice of Mr. Harold Beauchamp, chairman of directors of the Bank of New Zealand, on Saturday by a Dominion representative. Mr. Beauchamp said that it was only natural that the exchange rates should go up, and the increase was entirely duo to the' abnormal conditions now prevailing.' As regards tho increase from l?8th to 6-Bths per cent., tho Bank of Now Zealand was only charging the same rate as the other banks. The buying and selling rates in New Zealand were rather less than those obtaining in Australia at present. At first there was a considerable difference, but an adjustment had taken place, and there was not quite such a wide margin 'how, but it was in favour of people selling drafts here. The buying and selling rates of exchange were bound to increase in this country, as in London, said Mr. Beauchamp. The great object was to got money into London to-dtiy. Produce was likely to get blocked here, and the inability to get it to London would check finance. That was one reason why the exchange rate should go up. "To show the altered conditions," concluded ' Mr. Beauchamp, "quite recently banks were selling to other banks their telegraphic transfers at a su.bI stantial discount. To-day they are selling them at a big premium, the object being to get money into London from the Dominion. We have heard of this selling rate being as high as 30s. per cent, premium in Australia, whereas a few month's ago it was Us. to 12s. per cont. discount." There was no. indication to show when the abnormal conditions would relax sufficiently to allow a reduotion of the old rates