Exchange rates

Press, Volume CXII, Issue 32861, 9 March 1972, Page 2

Exchange rates

(N.Z Press Association) WELLINGTQN, Mar. 8. Careful consideration should be given to the technique of flexible exchange rates for stabilising the economy without flouting the efficiency rules, said Sir Alan Danks this evening. Sir Alan Danks, who is the chairman of the University Grants Committee, told the National Development Council that the weekly magazine, the “Economist,” had now thrown its influential weight behind the view that flexible or floating exchanges might be the best means of eliminating stagnation mixed with “stop-go” from the British economy. “Certainly the technique needs careful consideration in New Zealand as it promises much for us if it can allow our productivity to follow more effective channels than we allow.it under the constraints of the siege economy we have suffered under for so long,” he said. OVERSEAS TRADE The most significant modifications applied to New Zealand’s production mechanism arose from the high proportion of overseas trade with its well-known features of dependency and stop-go terms of trade. Wide-ranging fiscal and financial devices had been used to moderate the play of market forces. “We should recognise that the further we impose controls on an economy in the interests of self-sufficiency on the one hand, or of encouraging more exports on the other, the more risk there is that we are giving away the substance of economic efficiency for what may be the shadow of economic stability,” said Sir Alan Danks.