COVER ON DOLLAR

Press, Volume CXII, Issue 33096, 11 December 1972, Page 17

COVER ON DOLLAR

Aust, levy raisec f.V.Z. Press Assn.—Copyright) SYDNEY, Dec. 10. The Reserve Bank of Australia has raised its charges for forward cover on United States dollars from 2| per cent to 4 per cent per annum. The new charge, which compares with the one per cent level imposed in July, reflects the strength of feelings that the Australian dollar will be revalued The move is likely to increase pressure on the new Labour Government to make an early decision on whether or not to revalue upwards. It follows a massive increase in the amount of foreign currencies that the’ bank is covering forward and reflects anxieties by exporters that the Australian dollar will be revalued upwards soon, rather than weakness of the United States dollar. The rate has been progressively increased since it was introduced in July. Because the Australian dollar is now tied to the United States dollar, the rate for cover of sterling is a r rived at after adding the discount of around 3 per cent c r sterling to the United States dollar and the increased charge of 4 ner c"nt pe r annum. This effectivelv make® forward cover for sterling about 7 per cent per annum.