FALL IN BRITISH RESERVES

Press, Volume XCII, Issue 27782, 6 October 1955, Page 13

FALL IN BRITISH RESERVES

Treasury Figures For September LONDON, October 4. Britain’s gold and dollar reserves fell by 112,000,000 dollars during September, the Treasury announced tonight. They stood at 2,345,000.000 dollars on September 30, it was announced. The reserves are the central gold and dollar pool of the sterling area, of which Britain is the banker, and all Commonwealth countries, except Canada, are members.

They stood at 2,763,000,000 dollars last January. Since then they have been going down month by month with the exception of last April when they recovered slightly. The biggest dip this year took place in July when the reserves fell by 136,000,000 dollars.

Today’s Treasury statement emphasised that the September loss of gold and dollars took place in the first half of the month. The significance of this is that during that time rumours were sweeping Europe that Britain intended to devalue sterling. This caused speculators to unload a great deal of sterling which, in turn, meant that Britain had to spend gold and dollars to keep the value of the £ up. In the middle of the month the Chancellor of the Exchequer (Mr R. A. Butler) dismissed the rumours in a speech at Istanbul, Turkey, to world Finance Ministers and experts. The Treasury announcement also said that Britain, during September, had a deficit of £38.000,000 with the European Payments Union, the “clearing house” of trade between Western European nations. The fact that the reserves and the European Payments Union position stopped their slide in the middle of the month has made officials here more optimistic about the future. Britain’s deficit with the European Payments Union has been responsible during the last three months for much of the gold and dollar losses.