LOWER OVERDRAFT RATE.

Auckland Star, Volume LXII, Issue 259, 2 November 1931, Page 5

LOWER OVERDRAFT RATE.

MINIMUM NOW 6 1 PER CENT

OPERATIVE FROM YESTERDAY,

In accordance with the decision of the associated banks in New Zealand, announced at the end of July, the minimum rate of interest on advances has been reduced from.7 to 6J per cent as from yesterday, November 1. The rates of interest allowed by the banks on fixed deposits lodged on and after August 1 were reduced by & per. cent on 24 months deposits and \ per cent for shorter periods. Reason for Delay. In announcing the reductions, the official statment issued by the banks on July 28 said: —"From November 1 next suitable adjustments of ratee will be made and on that date a minimum rate of GJ per cent will come into operation. The usual practice of the banks is to alter the rates of interest in accordance with the movements in aggregate deposits and advances, as affected by the law of supply and. demand. On this occasion a departure from practice has been made for the purpose of cooperating with the Prime Minister's negotiations for a general voluntary arrangeiinent designed to bring about a cheapening of the price of money. "The reduction of rates of interest now announced will, of .course, not affect current fixed deposits. The banks will 1 continue to pay the higher rates borne I by those deposits, for a period up to 24 i months. For this reason it is necessary, in the unusual circumstances, that there should be some delay in reducing rates of interest on advances."-

The minimum overdraft rate was increased from 6£ per cent to 7 per cent on February 1, 1930. It Lad been G} per cent since July 9, 1928.