REDUCED BANK RATE

Ashburton Guardian, Volume 50, Issue 137, 22 March 1930, Page 10

REDUCED BANK RATE

LOWEST FOR OVER SEVEN YEARS. INFLUENCE ON WOOL MARKET. (United Press Association—Copyright.) LONDON. March 20. To-day the Bank of England discount rate was reduced to 3A per c£nt. This is the sixth change made in the course of the year, the rate haying been reduced. by progressive stages from €>i per cent., which high rate was largely attributable to the speculative boom, current at that time. The latest reduction was generally anticipated yesterday, investment securities displaying activity and strength on the Stock Exchange. This tendency was also marked this morning before the announcement of tne reduction was made. The oer cent, bank rate is the lowest for 7A years. It is believed that the reduction of the bank rate will react favourably on the wool market. The news of the reduction was well received at the wool exchange. A leading importer said there was nothing now to stand seriously in the way of revival of the wool industry. “We are likely to enjoy cheap money for some months,’’ he said. “There should be less restriction in the placing of new business.” Mr George Whitaker (president of the British Wool Federation) said: “It seems that one reason for the reduction is that the money- is not being used in the industry. The drop will be an incentive thus to use it again.” The “Daily Herald,” in an editorial, says: “The !bank rate reduction foreshadows an extension of credit to an extent not reached' for seven years. Rightly used, it should check the long decline in prices, which is the chief cause of our industries’ depression.” EFFECT IN NEW ZEALAND. CHRISTCHURCH, This Day. On being asked if the reduced discount rate would affect conditions in the Dominion, the manager of a local bank said that it might make it easier to borrow money in London, as there was now more available, although local conditions had to be taken into account. It would not, however, affect the exchange rate, which was governed by the amount of money in hand at the colonial banks at Home.