EXCHANGE POSITION

Evening Post, Volume CVIII, Issue 79, 30 September 1924, Page 8

EXCHANGE POSITION

REVISED AUSTRALIAN RATES

TRANSFER OF FUNDS MORE DIFFICULT. An important change in the bank rate 3 of exchange," Australia on London, was yesterday made operative. It will still further accentuate the exchange difficulty. The buying rates for Telegraph transfers ha^ been 55s per cent, discount, and the selling 35s per cent, discount; the buying rate on demand drafts had been 62s 6d per cent, and the selling rate 40s per cent, discount. The following changes came into operation yesterday: p ßu >'ine Selling Per cent. p er ce^j ..- .. Telegraph Transfers ... 40s Od dis". Cis Gd dis. On demand 45s Od dis 09s Od dis. Three days' sight .... 7os Od dis. 30 days " 50 s Od dis. 82s Gd dis. 60 days 55s Od dis 92s 6d dis. 90 days 57s 6d dis 102s Cd dis. 120 days ...............-_ The effect of these new rates On the Australian producer is that if he wishes to sell a British bill of £100 to the bank in Australia he will receive for his- £100, on demand, £96 12s 6d. An Australian merchant sending £100 to England, to be paid on demand, will be required to pay into his*bank in Australia £97 15s. The buying rate on demand, Australia on London, as it stood last week was 62s 6d per cent, discount; and the selling rate 40s per cent, discount. The London buying rates on Australia, \ as they have stood since 9th September, are as follow :— Buy""? . - Selling Per cent. Per ce % t — Telegraph Transfers 55s 0d- prem. Ss Od prem. On demand 47s Gd prem (is 3d dis. 30 days _ ' 17s cd dis. CO days " ' _ 28s M dis. 90 days !'.. — ■ In the case of the above rates, Lou- ! don on Australia, a trader who wishes to telegraph £100 to Australia would have to pay £2 15s; or if he wished to J post a draft, payable on demand he ', would have to pay £2 7s 6d. On the other hand, a British merchant negotia- j ting bills of goods shipped to Australia and payable on demand, would receive 5s ' in every £100, or would pay in £99 15s for the draft cashable in Australia for £100; if it were payable in thirty days I he would pay the bank the nominal sum of 6s 3d for arranging for the payment of the £100 over tb whoever was concerned. ' .

Considering the close character of the financial relations between Australia and New Zealand, it would not be surprising if the New Zealand on London exchange rates were prosently increased. At present the buying rate, on demand, is 40s per cent, discount, and the selling rate 5s per cent, discount. Telegraphic transfers selling rate, from 18th of August, has been at par. A striking contrast of the present exchange position is afforded when comparison is made with that of November, 1922, as it concerned ' Australia, and that of June, 1921, as it affected New Zealand. In 1922 at the period above mentioned, ! Australia was buying on demand bills lon London at £98 7s 6d, or at a charge of £1 12s 6d, as compared with the current rate of £3 7s 6d, or more than double. At the same time New Zealand was buying on demand bills on London _at £98 ss, or 2s 6d dearer than Australia. It is at present paying 40s, or, but 5s per £100 more for the s-ime service. June, 1921, is a memorable period in tho commercial and financial history of the Dominion. At the end of j that month the trade position stood as follows:— | r' £ I Imports C 5,688,021 ! Imports 60,821,631 Trado balance against tho Dominion £14,766,140 The banking position too, was equally unsatisfactory, as was to be seen in the following figures :— ' 30th June, 1921. £ Ailvancos ami Discounts 54,355,485 deposits 45,611.096 Excess advances or overdrafts 8,574,3! M During that trading period for New Zealand, ono of the most difficult it had ovor experienced, the exporter was paying nothing for bills on London for pioduce shipped from the Dominion. Kor every £100 worth of goods ho had to sell in Great Britain he received a full £100 in New Zealand; but the importer in tho Dominion, owing to the shortage of funds in London, had to pay £3 per cent, for Telegraphic transfers, and £1 17s 6d in every £100 on demand drafts. This only increased his difficulties arising; out of over-importing (as it turned out to be). It is now tho turn of the producer or exporter to feel tho pinch of accumulation of funds in London, due to realisations for produce and loan moneys raised there on account of Australia and Now Zealand. From all that can be learned of local bankers on the subject, the Australian rates avo unparalleled in the recent history, at any rate, of. exchange in this quarter of tho world.