LOAN REDEMPTION

Otago Daily Times, Issue 24411, 24 September 1940, Page 6

LOAN REDEMPTION

TOTAL OF £2,000,000 REPAID BEFORE DUE DATE LARGE SAVING IN INTEREST (Per United Press Association) ' CHRISTCHURCH, Sept. 23. The recent heavy falls in the sterling holdings of the Reserve Bank nf New Zealand have been due to the Government's decision to make parly repayment of loans falling due Two sums amounting to £1,000,000 each, not due until the end of the year, have been repaid well in advance, with a consequent considerable saving to the State. Details of these transactions were given by the Minister of Finance (Mr W. Nash) in an interview tonight, when he was asked for the reason for the sudden fall in the exchange holJings. 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 redeemable at due date or earlier," the Minister said. "Actually, the due date was in December, but our funds were such that we were able to redeem at an earlier date and so save the interest for the intervening period. The two different sums were for £1,000,000 each, and we were pleased to be able to pay them well before the due date."

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