FREE EXCHANGE

Gisborne Herald, Volume LXVI, Issue 19990, 15 July 1939, Page 2

FREE EXCHANGE

LICENSES FOR GOODS DIFFICULTIES MET THE “RLACjv” .MARKET Purchasers on the free or “black" exchange market of overseas funds which are intended to- be applied in the importation of goods are reported to be experiencing difficulties' in 'arranging import licenses'. There is reason to believe that the Government is closing the avenue through the import licensing regulations, whereby importers hope to obtain goods by the purchase of unofficial exchange. A great deal of business has been done in securing overseas credits outside the official funds, despite 'the fact that rates paid would add at least 15 per cent i.o the cost of goods obtained through this medium. Sellers of exchange from overseas have actually attended at the office of merchants in Auckland for the purpose. One of such overseas visitors, in addition to offering sums now abroad, produced £IOOO Bank of England notes to the manager of one firm and offered this amount on the basis of £132 New Zealand currency for £IOO English. Licenses for Imports Difficulties now reported to - be experienced by purchases of exchange in arranging the entry of goods through the Customs Department suggest that holders may be left with overseas funds cm their hands. It is pointed out that travellers' leaving New Zealand may in instances be prepared to purchase some portion of such funds, but it is possible that holders will experience losses. From the Government’s point of view the free exchange market is unwelcome for several reasons, one being that sums are diverted overseas Which normally would help to build up the official exchange funds. In the meantime the position with official exchange appears to be developing more stringently. Importers and persons going abroad are finding that,- when permits for funds are issued by the Reserve Bank such sums, arc not necessarily made available ib.v the trading banks. In one instance exactly half the sum authorised by the Reserve Bank was offered by a trading bank.