GOLD AND DOLLAR RESERVES

Press, Volume XC, Issue 27367, 4 June 1954, Page 11

GOLD AND DOLLAR RESERVES

Big Improvement Last Month LONDON, June 2. The sterling area’s gold and dollar reserves rose by 165,000,000 dollars to 2.985,000,000 dollars during May, the British Treasury announced today. The increase, in terms of sterling, is about £59,000,000. It is, on the surface, even a more spectacular improvement in reserves than the April increase of £48,000,000, which was the biggest gain for any month since 1950. But financial experts point out that a large proportion of the increase was registered in the first few days of May at a time when the boom in sterling was ending. They forecast that the general outlook for the immediate future is that there will be a quiet period with no major gains or losses

About 6,000,000 dollars of the May increase was due to United States defence aid and 39.000,000 dollars was received from the European Payments Union. This left 120,000.000 dollars as a real measure of the sterling area’s gain in transactions with the dollar area.

A Treasury spokesman said that leaving out abnormal influences, the genuine gain during May might be estimated at 30.000,000 to 40.000,000 dollars. Emphasising that reserves were not expected to continue to increase at the record rates of April and May, during the coming months certain special payments would have to be taken into account. About 7.000,000 dollars was paid to Canada on June 1 as service on Britain’s debt with that country. There might also be payments to the European Payments Union in part settlement of Britain’s accumulated deficit.