REDUCED BANK RATE.

Manawatu Standard, Volume XLVII, Issue 125, 26 April 1927, Page 7

REDUCED BANK RATE.

AN IMMEDIATE EFFECT. OPTIMIS I ON STOCK EXCHANGE. LONDON, April 23. The* loiig and eagerly lioped-for decrease in the bank rate has come at last—- about a week earlier than the market anticipated it. The reduction practically synchronised with the repayment ■ f the Bank of France’s debt of £33,COi ,000 to the Bank of England, and this settlement of the war debt abcul, three and a half years before it v a ; due no doubt influenced the directors >f the Bank of England in making tl sir decision. "■/■ .

, The rod iction had an immediate effect on ill > Stock Exchange, which had resumed:;.; fter the Easter 'holidays in an excel ;e t frame of blind, for it Stimulated the optimistic spirit still further,-a d prices-improved all round. Gilt-ecg d securities were naturally fliost a'ficted, arid Colonials mostly participat< I in the improvement, notably the iew West Australian loan, which la it week was quoted at a nincsixteentlis discount, and has now reached one-eig ith premium.

Indust ri. Is have also been well supported. French, tentes are showing much strength a . the result of the virtual stabilisatio i of the franc, as is shown by the fac that on the eve of the repayment c ' £33,000,000 the Bank of France wa : able to lower its discount rate fror.i ive and a half per cent, to five.

The Sfo k Exchange is now talking of a furtn ■ reduction in the bank rate to four pej cent., and it is not improbable this v ill come during the summer. —A. anc. I.Z. cablo.