LOWER EXCHANGE RATES.

Auckland Star, Volume LXIII, Issue 72, 26 March 1932, Page 4

LOWER EXCHANGE RATES.

EXPORTERS BENEFIT SLIGHTLY. An interesting effect of the recent reductions in the bank rate in England is a change in the exchange rate, New Zealand on London, which is slightly to the benefit of Dominion exports. Buying rates of exchange. New Zealand on London, on a basis of £100 London, are now: — £ s. (1. On demand 108 Hi 0 30 days 308 - (> 60 days 307 15 O 00 days 107 7 0 120 days 107 0 0 The rates were previously:— J £ s. d. On demand 108 10 0 30 days 10S i> 0 CO days 107 JO 0 00 days 307 O 0 120 days 106 1" 0 The benefit to New Zealand exporters ranges from 2/6 per, cent on 30-day drafts to 10/ per cent on 120-day drafts. Currencies between demand and 30 days are to be charged proportionately, allowance being made for three days grace. Selling rates are unchanged. The banks do not receive payment in London for term drafts until 30. GO, 90 or 120 days after the receipt of thu drafts. In order to realise the money, it is a customary thing for the banks to sell these drafts on the London market. Naturallv, the present low bank rate enables them to make better terms than they could before the recent reductions. Since they can get better terms in London, they can give better terms to New Zealand exporters.