FALL IN STERLING

Waikato Times, Volume 127, Issue 21226, 24 September 1940, Page 7

FALL IN STERLING

TWO LOAN PAYMENTS EARLIER REDEMPTION MADE SAVING IN INTEREST (By Telegraph.—Press Association) CHRISTCHURCH, Monday Recent heavy falls in 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 until 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, the Hon. W. 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 £1,033,313. 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 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 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 licenses. 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. Mr Nash 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.