DOMINION BANK RATE

Sun (Auckland), Volume 1, Issue 26, 22 April 1927, Page 9

DOMINION BANK RATE

REDUCTION UNLIKELY “MONEY STILL TIGHT” That there is very little prospect of a reduction in the New Zealand bank rate following the Bank of England’s reduction from 5 to 4J per cent., was the opinion expressed in local banking circles this morning. “If anything, the present prospects point to a hardening of the rate,” stated one banker. With exports not yet high enough to constitute a favourable trade balance and advances still in excess of deposits, he did not think that any reduction in the rate could be anticipated. In corroborating the above statement the manager of one of the Auckland banks stated that present indications pointed to a tightening up in the money market during the forthcoming winter. The reduction in the Bank of England rate, he said, would not necessarily reflect upon the New Zealand rate, London reductions often being more or less a tactical move in connection with the rate of exchange between England and America. Although the trade balance showed a slight improvement of late, money was still very tight and he did not think that any hope for a reduction would be held out until an improvement in the trade position eventuated.