REDISCOUNT RATE

Ashburton Guardian, Volume 59, Issue 38, 24 November 1938, Page 5

REDISCOUNT RATE

THE RISE IN NEW ZEALAND.

POSITION OF RESERVE -BANK.

COMMENT BY “THE TIMES.”

(United Press Association—Copyright.!} (Receive.d. Thisy Day* 10.25 a .ml)"'. LONDON, November 23.

The City- Editor of “The Times,” commenting on the rise of the rediscount rate in New Zealand, points out that the precise consequences arc difficult to gauge as there is no rigid link between the Reserve Bank’s rediscount rates and commercial banks’ rates on loans and overdrafts, but presumably the change will immediately affect the rate of New Zealand Treasury bills. “The Times” adds that the basic reason for the action is presumably the further reduction of the Reserve Bank’s sterling funds since the exchange adjustment on October 21. Its assets have fallen;—during the four weeks ended November 14—by £3,456,000 New Zealand pounds compared with £1,033,000 for the corresponding period of 1937, the drop during the year amounting to £11,000,000. The Reserve Bank adopted the traditional practice of raising’ the rate with the expectation of stemming the drain and reattracting money to New Zealand. . FALL IN GOVERNMENT STOCKS. SOCIAL SECURITY EXPENDITURE.

(Received This Day, 12.35 p.m.)

LONDON, November 23

The “Daily Mail” says that New Zealand stocks, which have been increasingly weak since the re-election of the Labour Government, showed afurther up to £l. Mr Savage’s statement to-day that the Government would not decrease expenditure unless wages were reduced does not allay the fears aroused by the Government’s, programme ..of expenditure on Social Security, ■ r