EXCHANGE AND DEBT

Evening Post, Volume CXIV, Issue 130, 29 November 1932, Page 10

EXCHANGE AND DEBT

LONDON:FUNDS GROWING

Messrs. H. Byron Moore, Day, -and Journeaux, Melbourne, in their November review, state that:—

"The exchange rate has been one of the factors responsible for the heavy Government deficits during the past two years, and, furthermore, must continue to be a hindrance to our Governments in reaching Budget equilibrium. The cost of remitting funds abroad to meet interest and sinking fund payments has been particularly heavy, and to raise the extra revenue it has been necessary to impose additional taxation, which burden has definitely retarded industrial progress. The conversion of portion ,of Australia's . overseas debt to a lower rate of interest will give some relief to taxpayers, but the main relief will only come when the exchange rate on London falls to par. "London funds are commencing to grow, and at the close of the present season the balances held in London should be very satisfactory. Australia's credit abroad is,rapidly improving, and it should not be very long before funding arrangements are completed in respect to our floating debt and Treasury billsin London. Probably this arrangement will be attempted simultaneously with the conversion of portion of our overseas debt, and when completed Australia's overseas financial position will be on a much sounder basis. •/The question of exchange rates is one which requires almost constant and expert attention, and-it is reasonable to assume that, the Commonwealth Bank Board is possessed of all the necessary qualifications, supported by the best technical advice accurately to assess the value of the Australian pound in terms of sterling and any alterations to existing rates will only be made after due and unbiased consideration of the salient circumstances."