OUR INTEREST BURDEN

King Country Chronicle, Volume XXV, Issue 3373, 3 October 1931, Page 3

OUR INTEREST BURDEN

THE STERLING MOVEMENT. EFFECT ON DOMINION. Although New Zealand is keeping a close watch on the movement of sterling brought about by Great Britain's departure from the gold standard, there is yet no evidence that the position will afford any relief to the burden of the Dominion's oversea interest obligations. New* Zealand's annual interest bill on her overseas indebtedness is payable in sterling, and it was pointed out by a high financial authority recently that as long as the exchange rates, New Zealand on London, remain as at present, it would make no difference whether sterling was off the gold standard or on it. If, however, sterling continued to be depreciated and some rise were shown in the prices for New Zealand's primary exportable products, an atleration in tbe rates of exchange could be expected, with a prospect of their dropping to parity. In that event interest payments would be affected to the appreciable advantage of New Zealand. "It is clear," added the authority, "that a rise in prices of our primary products oversea means that we will have to sell fewer products to obtain the required amount in sterling, or, in other words, our oversea obligations will absorb a lesser proportion of our exports."