RATES OF EXCHANGE.

Manawatu Standard, Volume L, Issue 117, 14 April 1930, Page 7

RATES OF EXCHANGE.

EFFECT ON TRADERS. Per Press Association. GISBORNE, April 13. That the present high rates of exchange for credit transfers on London are .affecting traders determinetally is shown by the receipt by a Gisborne merchant from a Home manufacturer of intimation that a London bank with which he usually dealt had refused to accept documents incidental to sight drafts in relation to his purchase from them in the absence of a letter of credit.

In the circumstances, the manufacturing firm had had to send the documents to another branch bank (also operating in New Zealand) and this bank has discounted the bills. Another local business man told a newspaper representative that, this, was the first instance of such a policy in over 50 years’ experience, and he would advise traders importing direct to see their bankers before sending orders to Britain and obtain letters of credit, which, he pointed out, are merely bank guarantees, that the money will be paid on the arrival of the goods. It is understood that the new policy is in force in connection with the great majority of banks operating on New Zealand. Tho move is said ; to be a reflex of Australian conditions, and the object is to discourage importation by traders lacking finance at a time when there is a shortage of funds in London, hut the regulation will be made general, so that every application for a letter of credit may be dealt with on its merits.