Bank Rates

Feilding Star, Volume VI, Issue 15, 15 July 1884, Page 2

Bank Rates

»■ Some excitement has been caused in financial circles (says the Post) by an announcement from the Bank of New South Wales of a reduction equal to 1£ per cent, in the rate of discount for " approved " paper. A general impression seems to have prevailed that the banks, like the insurance companies, have been acting in concert and were all pledged to a tariff, but this impression is altogether erroneous. For upwards of a year past the banks in New Zealand, while showing no desire to do cutting business, have acted quite independently of each . other, and each has been quite at^^ liberty to fix its own rates. For some time past it has been evident that the Bank of New South Wales has been accumulating specie, and its reserve in the colony must now amount to 8 considerable sum. It is, therefore, but natural that it should seek for good discounts at short rates, and offer exceptionally favourable terms for the use of its accrued capital in this direction. It ib worthy of remark, however, that the announcement of a reduction A discount rates for firstclass paper is not accompanied by any intimation of reduction in the ordinary rate of interest on overdrafts. It is, in fact, only a concession in one particular direction, and is due to' exceptional causes rather than to any general relaxation in the money market. Probably the other banks will follow the lead now set by the Bank of New South Wales. It is also whispered that a general reduction in the interest allowed on fixed deposits is not unlikely to take place ere long.