Interest talks

Press, 18 January 1986, Page 21

Interest talks

NZPA-Reuter Washington Leading industrial nations will discuss the possibility of bringing down their interest rates together when they meet in London this week-end. But they are unlikely to agree on action right away, according to Western monetary sources. The sources said economic conditions in member nations of the so-called Group of Five — the United States, Japan, West Germany, Britain and France — did not appear to favour a simultaneous reduction at present. United States Government sources said a “Washington Post” report quoting a high Treasury official as contradicting remarks on the interest rate issue by

the West German Economics Minister, Mr Martin Bangemann, may have gone too far.

Mr Bangemann told reporters that the United States Treasury Secretary, Mr James Baker, was interested in having everybody lower interest rates and wanted the issue discussed and, if possible, decided.

The “Post” quoted the official as saying there simply was not going to be a co-

ordinated interest-rate reduction exercise.

The remark depressed United States stock and bond, markets and helped underpin a weak United States dollar. The sources said it was possible the London meeting would debate whether to coordinate interest reductions when the timing was right. The Japanese Finance Minister, Mr Noboru Takeshita, appeared to hint at this when he said he hoped to see an “accord of perception” towards an easing of credit conditions emerge from the meeting. The French Finance Minister, Mr Pierre Beregovoy, made a similar assertion in Paris.

Lower interest rates in the major industrial nations would help spur economic growth and provide welcome relief to hard-pressed debtor nations whose debt servicing bills are determined by international interest rate levels.