CURRENCY SPLIT: INDIA-PAKISTAN TRADE TROUBLE

Greymouth Evening Star, 22 September 1949, Page 5

CURRENCY SPLIT: INDIA-PAKISTAN TRADE TROUBLE

NEW DELHI, Sept. 21 (Rec 11 a.m.).—-India took first action against Pakistan today following Pakistan s refusal to devalue its currency, thereby appreciating it against India. The Indian Government said the export of coal through commercial channels would cease. It would be handled by the Government. Coal is essential to Pakistan, which depends on India tor it. ' Pakistan’s* appreciation of the rupee against the Indian itipee has created a serious situation in India’s economy. India-Pakistan, trade is governed by a recent agreement under which Pakistan would supply specific quantities of raw jute and cotton in return for Indian coal, sugar and cotton textiles. The agreement was entered into on the basis of parity of currency value. New Delhi circles say the agreement will have to be readjusted following Pakistan’s decision not to devalue the rupee. . A spokesman for the jute mills said in Calcutta that in theory Pakistan’s decision would mean a 44 per cent increase in raw jute prices. He called on the Indian Government to ban the export of all kinds of jute from India “to mitigate the adverse effect of the Pakistan decision.”