RISE IN EXCHANGE

Hokitika Guardian, 15 September 1931, Page 3

RISE IN EXCHANGE

BANKER’S STATEMENT. /By Telegraph—Per Press Association) WELLINGTON, September 12. The Chairman of the Associated Banks answer to an inquiiy by : “Post” representative, as to the reported hanges in the near future in exchange rates, New Zealand on London, said: “W<e know nothing about the movement referred to, or the likelihood of it.”

N.Z. CREDIT IN LONDON

WELLINGTON, September 12

An interesting communication on the subject of the various opinions ex pressed regarding the issue' of New Zealand five per cent. London loan of £5,000,(XX) at £99 some months ago, has been received by the Prime Minister, Hon. Mr Forbes, from a correspondent in London. The letter states this London loan was by no means the failure that has been contended in some quarters. The correspondent says New Zealand stock is holding as well as anything on the marekt, which showed there was confidence in the present Government’s administration.

UNCERTAINTY AMONG FINANCIERS.

WELLINGTON, September 12

The announcement by the international agency operating in New Zealand that the'exchange rate on Australia has been reduced from' £lB 12s 6d to £7 10s per cent., and that the rate on London has been increas-eu from £lO to £2O per cent., lias had a very disturbing effect in banking and financial circles.

So far the hanks have, made no alteration in their rates of exchange, but the announcement by the private agency has caused them to discourage the transfer of large amounts to Australia. •

Australian securities have shown a definite rise on the Stock Exchange as a result of the reported change in the exchange rate. If the exchange rate on Australia were reduced from £lB 12s 6d per cent, to £7 10s one of the outcomes would be that peup.e who were still holding their Australian , dividend cheques because of tile high rate of exchange would now he prepared to cash them on the 7£ per cent, basis.

New Zealand seems to be gradually working round to the same basis as Australia so far as the exchange rate on .London is concerned, and the principal -effect ' will "be that fit- will very considerably restrict imports. An important effect of a, reduction in the exchange rate between New Zealand and Australia" is that it will restrict the flight of capital to Australia.

Care has to be exercised against speculation by persons who saw an opportunity of making money out of the exchange position. For instance, a person sending £IOO to Sydney would received £IBB 12s 6d for it there, but, if, a week later, the exchange rate were reduced to 7J pel" cent., that money could be .transi erred back to New Zealand at a cost of 1\ per cent. In that way the speculator wou.d clear about £8 in each £IOO. At present £B2 12s 6d was equal to £IOO in Australia..

AID THE KIDNEYS.

Do Not Endanger Life When There h

A Way to Avoid It

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