LOWER BANK RATE

Hokitika Guardian, 4 November 1929, Page 2

LOWER BANK RATE

CITY SURPRISED. THE REASONS OUTLINED. LONDON, October 31. The l'eduction in the bank rate was most unexpected in the city, but all reductions are popular, consequently the markets became buoyant. Giltedgeds rose sharply, industrials especially and internationals recovered strongly. The reasons for lowering the bank rate were,, firstly, the previous rate, though short-lived, caused exchanges in favour of Britain to move more rapidly than was anticipated, though '/it did not stop the outflow cf gold it checked it with unexpected effectiveness. Secondly £9,000,030 worth of gold is en route to London. Thirdly, the collapse of New York, by easing the money situation there, caused a return of European funds. Finally, the discount rate was far below the bank rate, with probability of the New York discount rate falling, as actually occurred to-day. The London Bank rate would not be kept up when, gold began to flow from New York to London. The bank certainly took a hold step, and it is to be hoped it will not cause exchanges to move adversely alnd check the progress of the replenishing of the of the depleted gold stocks.