TRANSFER OF MONEY

Dominion, Volume 24, Issue 105, 28 January 1931, Page 11

TRANSFER OF MONEY

Exchange on Australia

POLICY OF BANKS In regard to the exchange rates, New Zealand on Australia, it was emphasised yesterday by more than one banking authority that the present rates have been, framed solely with a view to “blocking arbitrage transactions between Australia and London via New Zealand, or in other words to prevent Australian exchange transactions between Australia and London being passed through 'New Zealand to secure the more favourable rates here. , . „ „ / Last week, the Bank of New South Wales announced new rates, New Zealand on Australia, buying £ll6/15/-, selling £ll6/5/ on the basis of £lOO New Zealand with no concessions. In this case as on previous occasions this month, the Bank of New South Wales acted independently of the other banks trading in New Zealand. No decision in the matter has been made by the associated banks of New Zealand. The position at present is that the bankers, other than the Bank of New South Wales, are quoting the buying rates announced on January 12, but they are not disposed to offer the high premium involved in the selling rate. It is understood that they are quoting the selling rate at par, reserving to themselves the right to grant a special premium in such cases as they deem it advisable to do so. It may be recalled that when on October 30 the associated banks advanced their rates New Zealand on Australia they quoted a buying discount of 87/6 per cent, and a selling premium of only 5/- per cent., with the proviso that a concession of 82/6 per cent, was to be granted on the buying side for all ordinary trade transactions. Full rates, without any concessions, were charged for all bills, All sorts of ingenious methods have been and are still being tried in Australia to secure London exchange. Wool was being bought in Australia by firms outside the trade and shipped to London, there to be sold to secure credit.

A case was mentioned’ yesterday of a business man in Australia who wished a traveller to bring £5OO worth of Australian silver coins to New Zealand with the object of getting them changed here and so providing credit for the purposes of London exchange. In this connection tradespeople and others should be chary about accepting large amounts of Australian silver currency which will be subject to the heavy exchange rates. It was stated yesterday by one banking authority that the banks were out .to conserve New Zealand’s position. The only alternative to a high “blocking” rate on Australia was a further substantial advance in the rates New Zealand on London. The banks were doing all they possibly could to prevent New Zealand funds in London being used to finance Australian imports. ■ Wanganui’s Payments Dominion Special Service. Wanganui, January 27. The Bank of New Zealand has advised the Wanganui City Council that it cannot remit to Melbourne the interest due on Gonville-Castlecliff tramways debentures other than at par. A special committee was set up to Interview the bank.