STERLING EXCHANGE

Evening Star, Issue 23370, 13 September 1939, Page 6

STERLING EXCHANGE

IMPORT PAYMENTS FORWARD PAYMENT ON LICENSES RESERVE BANK STATEMENT The Reserve Bank of New Zealand announces that the arrangement referred to in its statement to the Press on August 31 regarding forward exchange facilities is being extended and the position is now as set forth below:— Tho trading banks are authorised to enter into forward sterling exchange arrangements in respect of payments for licensed imports, provided—1. That the relative goods have either arrived in New Zealand or been shipped. 2. That the importer has, in respect of the transaction — (a) Paid into an irrevocable deposit account at a trading bank in New Zealand! for eventual remittance by T.T.. or otherwise, or to cover payment of the relative draft at or before maturity; or (b) Established with his banker an irrevocable letter of credit; or (c) Paid a sight draft; or (d) Accepted a usance draft, in which case the bank may stipulate that the arrangement is conditional on the draft being paid in due course. The facilities mentioned above will be available throughout the, Dominion in the course of a few days. The statement of August 31 referred to above is as follows: —In order to remove, as far as practicable, certain difficulties regarding the financing of imports, the Reserve Bank announces that the trading banks are being authorised, 'on receiving payment in New Zealand currency at the normal due date in respect of licensed imports from any country for the period ending June SO, 1940/ to "sell forward, at the official rate ruling on such due date, sterling to cover the corresponding amounts of New Zealand currency for which authorities for deferred remittance have been given. As exchange authorities have already been issued specifying the months in which remittances can be assured, importers will now be able to make ar-1 rangements fixing the cost to them of obtaining sterling in respect of such deferred remittances. As already announced, provision is also being made to enable license holders, by arrangement with their bankers, to make compensating adjustments as regard priority of remittance between any tariff item' and any other tariff item in the same category, subject to certain limitations as to adjustments between one country and another. EXPORT CREDITS STATEMENT BY FINANCE MINISTER [Pee United Press Association.] WELLINGTON, September 12. When the House of Itepresentatives met this afternoon Mr Wilkinson, iiv an urgent question to the Minister of Finance, Mr Nash, asked for information regarding the recent loan arranged by him in London amounting to £4,000,000 for commercial purposes, and its relationship to the export of goods from the United Kingdom to New Zealand. He also asked if the Minister were aware that English shippers were demanding sterling payment in London before executing orders for essential goods, and further asked Mr Nash to state if there were any stipulations made by the lenders regarding the establishment in New Zealand of uneconomic industries. ' In reply, Mr Nash stated that arrangements had been made for the Reserve Bank to issue remittance authorities fixing definitely the particular months when sterling could be made available for individual holders of import .licenses. Furthermore, any risk of loss from possible changes in the Tate, of exchange in the interim had been avoided by the trading banks being authorised to sell immediately sterling for delivery, at the times fixed in the remittance authorities. These arrangements could be reinforced if so desired by the United Kingdom _ exporter with a guarantee of the British Government, which should enable any United Kingdom exporter to obtain readily immediate finance from his bankers against shipment to New Zealand. Some cases had been brought to his notice where difficulty was being experienced in arranging for imports on a deferred payment basis, and these difficulties had naturally been accentuated by the war.. But lie undertook to investigate the specific cases which Mr Wilkinson said he would submit to him. Mr Nash further stated that, in the agreement between New Zealand and the United Kingdom, New Zealand had specified that its policy of licensing imports would not be used to foster uneconomic industries.