STERLING EXCHANGE

Manawatu Standard, Volume LX, Issue 254, 24 September 1940, Page 8

STERLING EXCHANGE

REASON FOR FALL

REPAYMENT OF LOANS.

" Per Press Association. CHRISTCHURCH, Sept. 23. Recent heavy falls, in the sterling holdings of the Reserve Bank of New Zealand have been due to the Government's' decision to make early payment of loans falling due. Two sums, amounting to £1,000,000 each, not due till the end of the year, - li'ave been paid well in advance,. with, consequent considerable saving to the State.

Details of these transactions were given by the Minister' of Finance (Hon. W. Nash) ip an interview, when he was asked for the reason for the sudden fall in exchange holdings. The fall for the week ended Monday, September 9, was £1,427.013, and the fall for the previous week. was £1,033,374. The latest report of' the bank recorded a rise of £460,756. “We had two loans falling due at the end of the year which were redeeniable at due date or earlier,” flu Minister said. “Actually ‘ the due date was in December, but our funds were such that Wo were able to redeem at the earlier date and so save interest for the intervening- period. Two different sums were for £1,000,000 each, and we were pleased to be able to pay them well before the due; date.” . :v

The Minister explained that earlier repayments would not affect the year’s exchange operations, as they would have had to he met sooner or later, and would not affect the issue of fifth period import licenses. Another fall would bo experienced -next month, when a local body loan for a considerable sum would fall due in London and would he repaid. The Minister could not give details of the interest saving involved in the earlier repayment of the two loans, hut it is estimated to approach £25,000.