MONEY MARKETS.

Manawatu Standard, Volume XLIX, Issue 270, 14 October 1929, Page 4

MONEY MARKETS.

TIGHTNESS IN COMMONWEALTH

There is an increasing tightness in the money markets of the Commonwealth. The fact that only £2,000,000 of the £5,000,000 in Victorian securities which fell due on October 1, were converted into Commonwealth 5J per cent, stock or bonds at £99, is confirmation of the rising tendency in interest rates.

According to the Melbourne Argus some financial authorities in Melbourne were surprised that as much as £2.000,000 was converted in the prevailing circumstances. Several municipalities prepared to pay 5J per cent, for loans are finding it difficult to have their requirements satisfied. While these are not in the same category as Commonwealth bonds, it is pointed out that in one instance, where the interest was guaranteed by a State Government, investors did not take up .the issue at the price named. A good deal of pessimism prevails inAustralia and arises from a number of influences converging at the one Eeriod. There are, for instance, some eavy Commonwealth and State loan commitments to be met in the near future, the stringency in the London •money market, the unusually low trading balances in London of Australian banks, and the fall in the prices of wool. It is pointed out, however, that no country escapes similar fluctuations in its fortunes. Every country has its good times and bad times. Australia is a country of vast resources and a few inches of rain in the ; right places would materially change the prospects.