Reserve Bank Wants N.Z. To Join I.M.F.

Press, Volume XCVII, Issue 28653, 1 August 1958, Page 10

Reserve Bank Wants N.Z. To Join I.M.F.

(New Zealand Press Association) WELLINGTON, July 31. Re-examination of the question of New Zealand’s membership of the International Monetary Fund and the World Bank is urged in the annual report of the board of directors of the Reserve Bank, tabled in Parliament today. The report says this is “most important.” The report says that New Zealand’s present situation draws attention to the importance of the international capital market.

“When circumstances cause a drop in export earnings of countries producing raw materials, it reduces their buying power and this in turn, after a time lag adversely . affects the exports and the industrial activity of other countries,” the report said. “The result could be a cumulative process of business recession, dwindling trade and employment, and mounting restrictions.

“All countries have an interest in preventing this happening, especially the industrialised countries which have recently gained as a result of changes in the terms of trade, and they could well make an effort to lend to the primary producing countries so that trade and employment can be maintained.’’

The report adds that the development of situations of this kind- was foreseen when the Bretton Woods institutions were established after the war.

“To meet the needs of countries whose external reserves were weak, whose ability to maintain full employment was threatened, and who were tempted to adopt measures to restrict trade, the International Monetary Fund was set up from which members could draw supplementary reserves in time of need.

“To ensure larger and more regular flow of loan money to countries engaged in programmes of economic development, the World Bank was also set up.” the report says. “Both institutions are agencies of United Nations, their members are the governments of the various countries, their objectives are full employment, development, stability and freedom from restrictions.’’