SELLING RATES

Hokitika Guardian, 17 December 1932, Page 6

SELLING RATES

BIG VARIATION STILL EXISTS. AUCKLAND, December 13. Considerable variation still exists in the selling rates quoted by the different trading banks for drafts oil Australian funds to London via New Zea-

land. However, importers experience some difficulty in obtaining what they claim is a fair premium for the transfer of Now Zealand money to Australia. Generally speaking the banks provide accomodation for their own customers only.. One bank for a considerable time was prepared to do business at £ll3 12s 6d, but it has nov.l reduced the selling ate to £ll2 10s. It is claimed that the previous difference of 15s between the buying and the selling rate was not a sufficient margin.

A few months ago the Auckland Chamber of Commerce took up the question of the Australian exchange with the Associated Chambers with a view to approaching the chairman of the Associated Banks. At the time it was claimed that only £lO5 in Australia could be obtained for £IOO New Zealand, while the banks charged about £ls the other way. 'The Auckland chamber drew attention to the “large profit’’ obtained by the banks, and stated that at the time there was little likelihood of speculative business in transferring funds to Australia and having them returned if the Austra-lian-New Zealand exchange was at parity. Up to the present no further information has been received by the Auckland chamber.

In practice, legitimate importers have very little trouble in arranging drafts. Quotations by the banks vary from a premium of £4 10s to £l2 10,s, individual eases in some instances receiving consideration. If the importer is not satisfied with the terms he has ■recourse to the outside market, which offers Australian exchange at about CIO or £ll. It, is stated that fairly substantial business is done outside tile bunks.

It is stated that the attitude of the hanks is designed to prevent undue speculation in buying Australian funds, but at the moment if appears, unlikely that New Zealand wiil raise its Loudon I exchange, rate to the Australian level. The view is also expressed that excessive imports from Australia, which are considerably higher than the oxports from New Zealand, are being discouraged. One importers said it appeared that the banks did not wish to deplete their Australian holdings.