GOVERNMENT LOANS

Evening Post, Volume CIX, Issue 7, 9 January 1930, Page 8

GOVERNMENT LOANS

THE INCREASED RATE LEVELLING TO PARITY (By Telegraph,.) (Special to "The Evening Post") DUNEDIN, Thia Day. "It docs not coiiie as a surprise," said a bank manager, in reference to the announcement by the Minister of Fnance (Sir Joseph Ward) that the present issue of 5 1-8 per cent/ debentures and inscribed stock was being withdrawn aud an issuo bearing interest at 5-i per cent, with a currency to 15th February, 1937, was being substituted. The price of money in New Zealand, he explained, had been below the London and Australian parity, and in order to get funds tho Government had now to bring its rate up. The hardening of interest rates in the Dominion should be the outcome, he stated, for the Government was the key .on which they all workod, and other rates would probably go up. He did not think, however, that the bank rate would be affected, as it already stood at 6} per cent. It would, however, affect tho issue of local bodies' debentures, he predicted, as some of the local bodies had been getting money at a rate as low as 5i per cant. He thought tho Government would have raised its rate long before this, for the 5 1-S per cent, rate had been in vogue for a long time, and the Government was practically being shut out from the London money markets owing to the higher rates of interest offered there. Thus the Government had perforce to obtain all its requirements within the Dominion, or in Australia, where the rates had for some time been .slightly higher than they were here. ;