N.Z. Now Needs Higher Overseas Reserves

Press, Volume XCIX, Issue 29232, 16 June 1960, Page 17

N.Z. Now Needs Higher Overseas Reserves

(N Z. Press Association—Copyright)

LONDON, June 15. Recent experiences and developments suggested New Zealand’s overseas reserves needed to be considerably higher than appeared necessary a few years ago, states Mr A. H. Ensor, chairman of the National Bank of New Zealand, in his annual statement to shareholders.

Wide price fluctuations during the last three years for dairy produce, meat and wool had underlined the need for an adequate overseas reserve, he said. There had been much discussion in the past about the extent to which New Zealand needed to build up its overseas funds in good times in order to withstand pressures caused by a season or two of low export prices. The maintenance of adequate overseas reserves had also become particularly important in view of the country’s growing industrialisation, he said.

Discussing the great growth in this direction, Mr Ensor said it could be confidently expected that

the mobilisation of the country's capital and resources together with a significant contribution from overseas would enable the production of a national income derived from manufacturing industries, which for many years had shown only slow growth, to be substantially increased. Such development would, in the long run, not only provide employment for the rapidly growing labour force, but would bring to the economy a welcome diversification which should help to relieve the balance of payments position. Mr Ensor urged the New Zealand Government to give some indication of its policy on hire purchase. Finance of this kind, he pointed out, had never by overseas standards been used extensively in New Zealand, but was increasing, and no doubt would be further encouraged as the result of the Government’s decision to introduce television. He also said the introduction of unit trusts in the Dorftinion