EXCHANGE RATE

Hawke's Bay Tribune, Volume XXIII, Issue 16, 30 December 1932, Page 7

EXCHANGE RATE

. GAINS AND LOSSES. PAYMENTS IN AUSTRALIA. One of the most interesting examples of how exchange differences operate in the transmission of money between various countries is given by the Auditor and Controller-General in discussing the proper treatment of exchange premiums and discounts in the public accounts (states the Wellington correspondent of the Auckland “Star”). The bulk of our overseas payments, as they are made in England, are subject to an addition because New Zealand currency stands on a lower plane than English sterling. But the instance quoted relates to debt repayments to Australian holders, and here New Zealand currency, being in a superior position, enabled a good profit to be made. Various payments had to be made during the year by the New Zealand Government in Australia. They totalled £360,685 18/9 in Australian currency, but owing to the rate of exchange being favourable to New Zealand, these debts were settled by transmitting £318,897 19/-. The difference of £51,787 19/9, represented a saving to New Zealand on exchange. Among the items was a loan redemption of £261,900, which was actually made for £224,259. On the other hand, the Treasury during the year 1931-32 was tho loser in transmitting to the United Kingdom and elsewhere moneys collected in tho courts of the Dominion in respect of maintenance payments. These were collected in New Zealand currency, but paid in the United Kingdom in sterling. The sums totalled over £4OOO. and the difference in exchange cost the Government over £4OO. In future, all these payments will be made subject tn exchange.