GOOD REACTION TO TIGHTER CONTROLS

Press, Volume CIV, Issue 30827, 12 August 1965, Page 17

GOOD REACTION TO TIGHTER CONTROLS

(New Zealand Press Association)

xAUCKLAND, August 11

Foreign exchange markets reacted favourably to the deflationary measures and tighter exchange controls announced in Britain, says the National Bank of New Zealand in its latest review. Spot sterling rose to a six-week high point.

Official support was still needed, but this does not necessarily mean a resulting loss of reserves. The recovery was lost as quickly as it had been gained when a fall approaching £loom was recorded in the gold and currency reserves during July.

With renewed pressure on sterling and the Prime Minister (Mr Wilson) having to deny rumours of devaluation, the Bank of England intervened with support for both the spot and forward marThe United States dollar rate fluctuated markedly during the last fortnight, but the net movement was small.

The Canadian dollar-New Zealand pound rate hardened quite strongly, however, with a movement of about 4s 6d a £lOO in favour of exporters and against importers. The forward selling prem-

ium has widened from I cent to | cent a month for the Canadian dollar and from i cent tb i cent for the United States dollar. The Italian lire and the Dutch guilder hardened, while the West German Deutschmark and the Swedish kronor softened against the New Zealand pound. All movements were small. A hardening of the Japanese yen was the only change in Eastern currency rates.