EXCHANGE RATE RUMOUR

Evening Star, Issue 21744, 12 June 1934, Page 13

EXCHANGE RATE RUMOUR

CIYPTIC CABLE CAUSES SPECULATION [Per United Press Association.] AUCKLAND, June 11. Speculation concerning a possible alteration in the exchange rate on London received a fillip in'Auckland today when a cablegram was received from London stating that "the agreement between the. .Government ami the banks has been renewed lor a further six- inoilths, and there will be no immediate alteration in the exchange rate.” / ‘ , . Although the cablegram was explicit enough in its terms a knowledge of the background of. the exchange negotiations between the Government and the banks caused the Auckland recipients to doubt whether the message ineaht exactly what it said. A cablegram was despatched seeking further information. If was. suggested that the agreement referred to the.. Government’s guarantee to the banks - against Joss on their exchange operations, but it was pointed out that the. Banks Indemnity (.Exchange) Act docs hot impose any limit as to ! the duration of the guarantee. When 1 the message was referred' to the Prime Minister (Mr Forbes) in Wellington to-night, he said he was at a loss to understand it. "Mr Forbes said there was nothing in the Act concerning a tiuie limit. There was no need for the renewal of any agreement, and the present position would continue until other arrangements wore made. The announcement by the. Government that it was not intended to alter the exchange rate during the current season of producion was recalled to Mr Forbes’s mind. ' ; J . " But that docs not mean thafc.it will be altered cither way at the end of the season,” he replied, “ All we did was to give an assurance to the wool buyers that the rate would not be' altered while they were operating.” .