THE BANK RATE

Evening Post, Volume CIII, Issue 141, 17 June 1922, Page 5

THE BANK RATE

REDUCTION WELCOMED

MOVING TOWAEDS NORMALITY.

(BNITBD PRESS ASSOCIATION.—COPIRIGHT.)

(AUSTRALIAN - NEW ZEALAND CABLE ASSOCIATION.) * LONDON, 16th June.

Financial and commercial circles welcome the reduction of the bank rate to 3j per cent., the lowest point since January, 1914, as being an indication that conditions are moving towards normality. The reduction will stimulate the recovery of commerce. It is believed that the governors of the Bank of England were influenced in their decision by the improved outlook for labour and in Ireland, also that they were desirous of making the Indian loan a success. Cheap money is essential, as other extensive loan operations are imminent.

"Needless to say, I was very pleased to see it," said the Prime Minister, in discussing the fall in the bank rate. "I think it is a very fine thing for all the Dominions,, and under existing circumstances more particularly perhaps for New Zealand, because it means that money is plentiful in England and gradually getting cheaper, and as money becomes more plentiful so will trade improve, along with the purchasing power of the people who are our best customers. I hope the time will soon come when we shall find a, reduction in the rate of interest in this country. Local bodies, farmers, and businessmen all want cheap money, and the sooner it comes along the better."