No Alarms Over Franc

Press, Volume CIX, Issue 31975, 30 April 1969, Page 13

No Alarms Over Franc

fN.ZP.A.-Reuter—Copyright

WASHINGTON, April 29. American and British Treasure chiefs believe France will escape financial convulsions despite General de Gaulle’s resignation.

According to informed sources, this feeling of optimism emerged at talks here last night between the Chancellor of the Exchequer (Mr Roy Jenkins) and the United States Treasury Secretary (Mr David Kennedy).

The sources said they discussed the implications of the dramatic French developments and reached a tentative conclusion that there was no immediate cause for alarm. The British Chancellor is in Washington for his first visit since the Nixon Administration took office three months ago.

Yesterday the French franc fell to its lowest value since the November monetary crisis and gold prices soared to record levels after the resig-' nation of General de Gaulle.

The Bank of France yielded to speculative pressure against the franc this afternoon. reducing the rate at which it sells dollars in support of the currency ’o the lowest permissible door level of 49740 francs to the dollar Gold bullion values reached a 21-year peak in reaction to the possible monetary implications of the general’s departure.

Banking experts said the franc remained as technically strong as before the refer■ndum, both in terms of reserves and controls and that he French economy remained •s basically unsettled. The future of the French ranc now rests on three im>onderables—the monetary entiments of General de Gaulle’s successor to the ■•residency, the extent to vhich international monetary

authorities will support the franc, and the possible reemergence of militant trade union claims for higher wages.

But for the next 20 to 35 days the currency is confidently regarded as "safe." since the interim President (Mr Alain Poher) is considered extremely unlikely to take any action on monetarv policy.

The West German central bank yesterday intervened three times on the foreign exchange market in an attempt to stem a heavy buying of marks sparked off by President de Gaulle's resignation. The bank lowered its buying and selling prices for the dollar—thus making marks more expensive. But dealers reported that the move bad little effect. Meanwhile. Federal Bank president. Karl Blessing, said in Hamburg that central banks of the Common Market and "group of ten” leading financial nations stood firm and united behind the French franc.