N.Z. INTERESTS

Hokitika Guardian, 28 March 1933, Page 8

N.Z. INTERESTS

MONEY IN AUSTRALIA

“OUTSIDE” EXCHANGE MARKET

The difficulties which still restrict the transfer of capital funds from Australia to New Zealand have recently been reflected in a marked diminution of dealings with Australian interest on the stock exchange. Some brokers halve lost a considerable amount of business as a result of' the restrictions imposed by the. banks upon the repatriation of New. Zealand money in Australia, and to surmount this obstacle a fairly active “outside” market has been created. .

.The banks are making available exchange for ordinary trading purposes, although it is reported that Australian traders are unable to take for granted the acceptance of their bills . When the alteration in exchange was made in January, which brought the currencies of Australia and New Zealand nominally into line, there was so much competition in Australia for New Zealand money that the rate rose to considerably more than that quoted by the banks. * Reviewing the position last week the Melbourne Argus stated that transactions at a premium of 32s 6d per cent were reported, but the outside exchange market had fallen now to about 15s to 20s per cent. As New Zealand had large sums at credit in London it had been easy for New Zealanders to obtain London funds, and private reports stated that the rate bad fallen to £IOO London for £124 in New Zealand, or 1 per cent below the carded rate. This had made possible a little triangular business between Australia, New Zealand and London, as traders in Australia requiring fundd in London could purchase them through financial houses which had money in New Zealand. In such transactions a small premium could be paid for New Zealand funds, with which London funds could be purchased at a discount.