STERLING EXCHANGE

Wairarapa Times-Age, 24 September 1940, Page 2

STERLING EXCHANGE

I RECENT HEAVY FALLS. MINISTERIAL STATEMENT. (By Telegraph—Press Association.) CHRISTCHURCH, September 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, have been paid well in advance, with consequent considerable saving to the State. Details of these transactions were given by the Minister of Finance, Mr Nash, in 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 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 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.”

The Minister explained that 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.