Hectic Speculation On World Money Markets

Press, Volume CIX, Issue 31984, 10 May 1969, Page 13

Hectic Speculation On World Money Markets

(N^-P-A.-Reuter—Copyright)

BONN, May 9.

The West German Chancellor (Dr Kurt Kiesinger) began a crucial day of talks on the international monetary crisis today by conferring with the Leader of the Opposition (Mr Waiter Scheel). Dr Kiesinger called in the chairman of the Free Democratic Party an hour before he was due to preside over a meeting of Government coalition leaders at which he was expected to face strong pressure from the Minister of Economics (Professor Karl Schiller) to revalue the Deutschmark. Early today, the deputy Government spokesman (Mr Conrad Ahlers) had said that in today’s crisis talks the

Chancellor would “continue

emphatically to maintain his viewpoint that revaluation is out of the question.” The Government talks come after a hectic day of speculation on the international money markets. In Frankfurt, dealers said speculation exceeded the level of the international monetary crisis of last November. According to financial sources, the West German Federal Bank was forced to buy more than sUSBsom—the amount reached at the peak Of last November's crisis— as “hot money" flowed into the country on speculation that revaluation was imminent Demand for Deutschmarks reached such hectic heights on the New Yorit money mar* ket that the United States Federal Reserve Board stopped supplying the currency to the foreign exchange, leaving the Deutschmark to burst through its official dollar ceiling. <■

In Paris, the Deutschmark

closed yesterday at a record figure of 125.520/600. And in London, despite Bank of England support, the pound sterling was battered down to its dollar floor of 2.3825. During yesterday, officials in Bonn insisted that the speculative rush into the Deutschmark was still within manageable bounds, and reaffirmed the "Id Government position that-West Germany was prepared only to revalue as part of an international realignment of parities. But by evening, one financial source commented: “Events seem to be overtaking people as they speak." The conflicting views of Dr Kiesihger’s Christian Democratsjand Professor Schiller’s Social. ' Democrats will be aired at a‘meeting of the socalled Kressbronn Circle, which groups leading Ministers and Parliamentarians of both coalition parties: Later, the Chancellor is due

to hold a restricted meeting with the men most directly involved in considerations of whether the Deutschmark should be revalued—Professor Schiller, the Minister of Finance (Mr Franz Strauss), and the president of the. Federal Bank (Mr Karl Blessing). In an eight-hour conference which ended at midnight last night, Dr Kiesinger discussed the currency issue with leaders of his own party. Their meeting was also attended by one of the Federal Bank’s directors, Mr Otmar Emminger and the chairman of the powerful commercial bank, the Deutsche Bank (Dr Hermann Abs). After the Kressbronn Circle meeting, the Chancellor and Mr Strauss—so far the most outspoken opponent of revaluation—may address the Federal Upper House and give the first firm indication of what the Government intends to do.