FOREIGN EXCHANGE

Auckland Star, Volume LXXIII, Issue 135, 10 June 1942, Page 3

FOREIGN EXCHANGE

POSITION* DETERIORATING ?

The Financial News states that it would be Idle to deny that recent developments in the Far East have resulted in some deterioration of the foreign exchange position of the sterling bloc, states the London correspondent of the Melbourne Argus.

Until the end of last year the adverse trade balance of Britain was largely offset by exports of tin and rubber from British and Dutch possessions in Far East to U.S.A. This valuable source of foreign exchange has ceased for the time being. Moreover, exports from other British possessions have had to be diverted to England to offset the loss of Far Eastern supplies. ~ As a result of a further desire to intensify the war effort, our export trade has been allowed to decline. There is a widespread belief that the foreign exchange position ceased to matter after USA passed the Lease or Lend Act. The fact is that over a year after the passing of the act' very considerable payments have to be made - for goods ordered before its passing. Moreover, the Lease or Lend Act does not cover everything and cash has to be found for paying for part of otfr imports from U.S.A. In addition, imports from other non-sterling countries must be paid for.