BALANCE OF PAYMENTS

Press, Volume LXXXIX, Issue 27011, 10 April 1953, Page 9

BALANCE OF PAYMENTS

Improvement In Britain (N.Z. Press Association —Copyright) LONDON, April 8. Britain’s balance of payment position with the rest of the world improved by £53,000,000 in the second six months of 1952. Of this £5,000,000 represented defence aid. A White Paper published today says that exports for the second half of the year fell by £228,000,000, but this was more than offset by a reduction in imports of £285,000,000. The White Paper also showed that at the end of the first quarter of this year gold and dollar reserves were higher that at any period in 1952. They stood at £774,000,000. The highest figure for 1952 was £659,000,000, in the last quarter. Reuter’s financial editor says that United States holdings of sterling balances rose from £19,000,000 last June to £34,000,000 at the end of 1952. Their build-up in the second half of last year reflected a revival of confidence in sterling since “American account sterling” can be converted into dollars whenever the American holders wish.

A senior Treasury official said that, barring some violent change in world markets, Britain could see her way at least for some months ahead. If the current peace moves extended the decline in commodity prices, Britain’s own trading position would improve since she is a big importer of commodities. The effect on Britain’s and the sterling area’s export earnings would remain to be seen. Liabilities Fall Latin America is virtually cleaned out of sterling. Its sterling balances fell from £57,000,000 at the end of 1951 to a mere £6,000,000 at the end of 1952. The sterling balances held by other non-sterling. countries fell throughout 1952. At the end of the year they totalled £714,000,000. British colonies continued to amass sterling. Their sterling balances have soared from £556,000,000 in 1948 to £967,000,000 at the end of 1951 and £1,065,000,000 at the end of 1952. Other sterling area countries are by far the biggest holders of sterling. Their balances fell from £1,825,000,000 at the end of 1951 to £1,531,000,000 in June, but recovered to £1.603.000.000 at the end of 1952. The upshot of all these movements was that Britain’s, total liabilities on sterling balances fell from £3,807,000,000 at the end of 1951 to £3,397,000,000 last June and increased to £5,442,000,000 in December. After a big fall of £410,000,000 in the first half of 1952, they rose by £25.000.000 in the second half. Today’s Treasury White Paper on the balance of payments contained some other new figures. Including defence aid, Britain’s current balance with the dollar area improved by £264,000,000 between 1951 and 1952. Between the first and second halves of 1952, there was an improvement of £124,000,000 in the balance with the dollar area.