INTEREST RATES

Evening Post, Volume CXXXII, Issue 45, 21 August 1941, Page 13

INTEREST RATES

STATE DEPARTMENTS

"The reduction in overdraft rates will be of general benefit to all producers and traders and, indirectly, to all sections of the community," said the Minister of Finance (Mr. Nash) in the House of Representatives yesterday in a written reply to a question asked by Mr. H. G. Dickie (National, Patea), who had asked whether in view of the fact that the associated banks had reduced the rate of interest on first-class accounts from 4| per cent, to 4 per cent., the Minister would consider making a proportionate reduction in interest rates by the State lending departments. "The reduced rates apply only to money at call or invested for short periods," said the Minister. "Lending rates of State departments come within an entirely different category and are bound up with the whole question of mortgage finance, which fairly recently has been subject to review in individual cases under the mortgagors' and lessees' rehabilitation legislation. Regard must be had to the cost of obtaining capital for long-term lending. In any case the 4 1-8 per cent, lending rate of the State Advances Corporation, the principal State lending institution, for periods up to 45 years compares favourably with the reduced rates for call and short-term money."