CHEAPER FUNDS.

Auckland Star, Volume LXX, Issue 219, 16 September 1939, Page 16

CHEAPER FUNDS.

IN "BLACK" MARKET.

CHANGE IN DOMINION

EFFECT OF WAR CONDITIONS

Hate- •if exchange in the uunllicial i>r "black market have fallen sharply during the past furl nigh', all < I transactions haw liccii completed in Auckland at £7 10/ ,ilio\e the bank rate, compared "I'll at lea «t CIU nlnne prc\i< ui-ly. \ i-i jll factors have been I e«ponsililc l"r i his i li.iniri'. I In- rui I.a run iuipuie(i ily the Australian I iiiv criiiueut nil the export of fund--1 '"in the ( imi mi unvcii 11 h unless "marrieil ' in import tin ii-iii'l inn- has hail the effect nt' 11 i m'i hi ra <■ in g traii-ler* "I ' li' J il lii'iii \e« Zealand tu Australia. "lieie the* will Im- tied up. and the .ii linn nf the l!riti«h Government in 111.11 >i Ii- ill |he oversea - a-i'h nf British in \e*l hi -i h.is had ii p-ycholiigiea 1 effect in local iin est melll circles. Further, ii is cnii-iilrrcd that New Zealanders « ill think twice before sending money tn I{r itii in fnr investment under war

linn nt the major influences affecting lhe 1111■ 111 i- i,i I exchange market is the -tep taken ii\ the New Zealand Government ill flipping the issue of import licence- mi ami 11'111 is-.iini of funds basis. tliiK requiring all importers to arrange I heir purchases tiirnugii I lie bunks, subject tn Unserve Hank permits. This has eliminated demands by traders for outside exchange accommodation and has forced all trading transactions into normal banking clninne|«.

It. is exported that future purchases of iiniifliriiil exchange will lie conflned lei iirunit requirements which canneit be met in other wiivs, and against this there is a jiossiiiilit v that some funds held abroad may find their way txicl< to the Dominion.

During the period of active dealing in iinnffieitil exchange nvpr the pn*t nine month*, the rate generally paid has been around to £100 sterling, and in isolated ea-es has cNen to £1-10. The nia rgin eif about 10 per eent which developed between the prices of Australian shares lielel in New Zealand anel Australia has shown a reaction recently, and the latest indication* are that the advantage to sellers has been reduced.