STERLING IN NEW YORK.

Auckland Star, Volume LXXI, Issue 81, 5 April 1940, Page 4

STERLING IN NEW YORK.

(Received 12.30 p.m.) NEW YORK, April 4. Sterling is quoted in New York to-day at 3.07%. The fall in sterling as expressed in American dollars has been evident for some time, and though the American action, as the cablegram states, is due to a desire to protect their own industries, the real causes of sterling weakness are the facts that New York is a. free market and the tighter control of the dollar exchange market exercised by the British authorities. The free market gives the exporter with dollars to sell a considerable advantage over the official rate, as to exchange for £1 sterling he has to find only 3.37% dollars (the present rate), whereas, if he dealt through official channels, he would have to find 4.03 dollars. Further, if a person wishes to deal in sterling but for some reason does not wish to go through the official. channels, he can secure it on the free market. It is obvious that, as Britain is dealing so extensively with the United States, due to war purchases, she will be anxious to conserve all the dollar exchange she can secure. British exporters to the United States must now make arrangements for payment in dollars or through a letter of credit registered with the Bank of England. The latter system is much the same ae operates in New Zealand with any merchant wishing to import from America.