N.Z. dollar discount goes

Press, Volume CXI, Issue 32701, 2 September 1971, Page 1

N.Z. dollar discount goes

The discount at which New Zealand currency has been traded in black markets and unofficial markets in the East for many years has disappeared. The New Zealand dollar note now changes hands in these markets at virtually the same rate as the Australian dollar with which it is-offi-cially at. parity. The improvement in the strength of the New Zealand dollar is attributable to the relaxation, announced in the Budget in June, of the restrictions on the repatriation of New Zealand currency—although it has taken two months for the market to adjust fully. The August 30 issue of "Newsweek’ reports Deak and Company (Far East), Ltd,

quotations for foreign l bank-j notes in Hong Kong on August 20. On that date SUSI was worth SNZO.9O, compared with SNZO.96 the week before, and NZI.OO before the Budget. These rates represent discounts of 1.1 per cent, 7.3 per cent and 10 per cent respectively. Throughout this period the Australian dollar was quoted at SUSI to sAusto.B9. The official rate for both currencies is $0.89. David Barber, the New Zealand Press Association’s staff correspondent in Singapore—where unofficial currency rates move in accordance with those quoted in the larger Hong Kong market—reported on June 25: “The Budget relaxations allowing returning New Zealanders to take home unlimited New Zealand dollars'

in small notes, as well as increasing travel allotments to SNZIBOO a year, have hot made their mark yet. Most of Change Alley’s Indian money dealers had not heard of the Budget moves.”

Barber recalled that in previous years New Zealand dollar notes could be bought at “staggering discounts—often up to 50 per cent.” These days had clearly gone, he said; “observers say it Will be only a matter of time before the Budget changes bring the New Zealand dollar back to its official level.” By August 20 none of the exchange rates quoted in Hong Kong had been’ affected by President Nixon’s announcement on August 15 that the United States dollar would no longer be convertible into gold.

The Reserve. Bank has notified the central banks of other countries that New Zealand bank notes of small denominations may now be repatriated through the banking system. Representatives of several trading banks said in Christchurch yesterday that in Australia, at least, this advice had been circulated to all trading banks there. They did not expect the new convertibility of New Zealand currency would result in a great increase in the number of New Zealand bank notes exchanged in Austra-| lia, as most travellers prefer-, red to take their cash in the; form of travellers’ cheques.; A Reserve Bank spokesman: said that so far’there had; been a negligible increase in the number of New Zealand! banknotes repatriated from I abroad. 1