Devaluation Benefits

Press, Volume CVIII, Issue 31597, 7 February 1968, Page 1

Devaluation Benefits

Beneficial effects of devaluation for New Zealand are starting to show in the Reserve Bank’s accounts of overseas transactions.

Releasing the accounts for the year ended December, 1967, the bank says the 19.45 per cent devaluation of the New Zealand dollar on November 21 appears to have accentuated the trends that were earlier in evidence even though it affected the outcome of the accounts only for December and the effect for the whole year was slight.

One of the trends accentuated was a levelling of the deficit on invisible transactions. Payments eased in nearly all groups apart from payments for freight and fares, and emigrants’ transfers. Notable among the decreasing items were remittances for travel, indicating that the tightening of travel allowances announced in March, 1967, together with the fiscal measures taken to reduce demand, were having effect. In December, the net inflow of private capital was $3.7m, which may indicate that devaluation has caused some repatriation of private overseas funds.

(1967 Accounts, Back Page)