CHEAPER MONEY

Evening Post, Volume CXXXVIII, Issue 74, 25 September 1944, Page 4

CHEAPER MONEY

LOWER INTEREST RATES

The possibility of lower interest rates in the future was mentioned by the Minister of Finance (Mr. Nash) when he discussed the Victory Loan position last night.

Many reasons had been given for the fact that subscriptions to the loan so far had been less than normal said Mr. Nash. Some suggested that interest offered was too low and that that might mean a fall in the value of securities as happened after the last war.

In the last war," said the Minister, interest rates in Britain ran from £3 16s 4d to £5 6s 5d per cent. In the United States they were 4 to 4£ per cent. In New Zealand they were 3£ to 6 per cent. But in this war no interest rate in any of these countries has exceeded 3 per cent. The rates determined by policy for war and postwar in Britain—unless lower are determined, as they might be—are at present 21- per cent, for short-term and 3 per cent, for long-term loans. In the United States the rates are 2 per cent, for short-term and 2£ per cent, for long-term.

"In New Zealand our rates have been 2J per cent, for short-term and 3 per cent, for long-term, and so far as legislative enactment can provide these interest rates are likely to be lower than higher. I believe that money will inevitably be cheaper."