EXCHANGE RATE

Evening Post, Issue 89, 17 April 1933, Page 8

EXCHANGE RATE

JVILL IT BE RAISED ?

STATEMENT BY MINISTER

"The Government docs not contemplate, any further iacreaso iv tke rate of cxehango on London as a matter of economic adjustment, but as the world situation is still. obscuro no doiinite commitment can bo1 made in regard to the future." This statement is contained in a letter on the, exchange position signed by tho. Minister of Finance (the Rt. Hon. J. G. Coates) and rocoived by the vice-piesident o£ the, Auckland Chamber of- Commerce, states the "Auckland, Star." .

' 'As: it is ■ impossible to foresee the. future coujse, of events," continues the letter, "the Government obviously cannot give- any undertaking- as to what action may be necessary in the interests of the. Dominion. In the meantime, however, it is. pointed out that the Banks Indemnity Exchange Act refers'only to transactions at the current rate of exchange or at rates intermediate between the current rate and tho former rate of 10 per cent. It makes no provision for any rate above the ■ present rates of exchange. "Apart altogether from the fixation of the rate as a mattor of economic adjustment, it. is pointed out that if owing to further heavy falls in the volume of the Dominion's exports or for any other reason the balance of trade becomes heavily adverse^ it might be necessary from a purely banking standpoint to-further increase the rate of exchange. In such a case, however, there would be ito.question of : any Government guarantee, for that would obviously not be necessary. At the same time, as in the past, it would probably not be feasible to give any motive of the change- in the rates. At present, however, the trade balance is satisfactory, and no increase in the exchange rates on this account: need be feared." : •