London Comment On Sterling Area

Press, Volume CVI, Issue 31086, 15 June 1966, Page 17

London Comment On Sterling Area

(Special Crspdt. N.Z.P.A) LONDON, June 14. Sections of the British press have interpreted yesterday’s statements by the New Zealand Deputy Prime Minister, Mr Marshall, on investment a* a broad hint that if Britain’s restrictions on capital outflow continued much longer the future of New Zealand’s sterling balance In London would be doubtful. The “Guardian,” however, said that Whitehall opinion was “not greatly stirred by Mr Marshall's implied threat to leave the sterling area. Sterling area countries were not bound to keep balances In London, the newspaper added. They could withdraw them at any time.

There was also no necessary connexion between balances and the provision of loans. At present, interest rates in London were attractive and New Zealand would tend to lose if its money were withdrawn.

The "Guardian” said Whitehall was uncertain about the effect the British “voluntary” restrictions had had on capital outflow to New Zealand. In New Zealand, more than In other countries, investment might be expected to generate other exports. “Part of the trouble, it is pointed out, is that Australia land New Zealand insist on ; describing themselves as ‘developing’ countries although their standard of living is among the highest," said the journal.