THE EXCHANGE RATE

Press, Volume LXXXIV, Issue 25580, 23 August 1948, Page 2

THE EXCHANGE RATE

Sir, —The popular understanding of such mysteries as the exchange rate is not very lucid; and that is not surprising when those who are accepted authorities make mistakes in statements for publication. For example, the chairman of the Christchurch Stock Exchange stated that the exchange rate had been reduced by 25 per cent.; and editorials in other journals have made the same statement. The fact is that goods or payments previously worth £125 are now worth £lOO, so that £125 has been reduced by £25, or one-fifth, as correctly stated in “The Press” leading article; a reduction of 20 per cent. only. Surely prominent financiers and journalists would not deliberately mislead readers.—Yours, etc., MATT. GRANT. August 21, 1948. Sir, —A quotation from “The Press” this morning: “Mr S. G. Holland said: ‘You won’t get more production by cutting the farmers’ income 25 per cent.’” Lest simple people take this as an authoritative statement that the readjustment of the exchange rate means a reduction of 25 per cent., and get unduly worried, it might be well to assure them that the reduction is only 20 per cent. —Yours, etc., THE STRAP. August 20. 1948.

Sir, —The alteration of the New Zealand exchange rate to parity is the most sensible piece of work Mr Nash has done yet. It was long overdue. The farmers have had seven or eight most prosperous years, and have no cause to grumble; and it is the least New Zealand could do to help Britain in the tight corner in which she now finds herself financially, owing to her bearing the brunt of the last war financially as well as otherwise. It should be a help to her in her exporting programme, and should also help to bring down prices in New Zealand to the consumer—in fact, a halt to inflation.—Yours, etc., NOT A LABOURITE. August 21. 1948.