Exchange Problems

Manawatu Times, Volume LV, Issue 6810, 17 March 1932, Page 6

Exchange Problems

POSITION BETWEEN AUSTKAHLA AND DOMINION Per Press Association. WELLINGTON, Last Night. Mr. W. J. Poison asked in the House to-day whether the Government would make representations to tho banks with a view to obtaining a reduction in charges for service of exchange in conformity with tho reduction in the London bank rato. He said the Australian banks had reduced their charges by 2.(3 per cent as a result of the fall in the bank rate. Mr. Forbes replied that representations had already been made to tho banks and tho matter was under consideration. Mr. J. O’Brien aslccd whether in view of the fact that the banks now had complete control of the exchange, the Government would request them to bring the rate between the Dominion and Australia as closely as possible to par. Ho said tho rate of exchange between New Zealand and Australia was seriously affecting the Dominion coal and timber industries insofar as it favoured tho importation of coal into the Dominion and detrimentally affected New' Zealand’s export of timber to Australia. 11c declared that if the exchange rate were brought to par it would have the effect of providing employment for a considerable number of men in these two industries.

Mr. Forbes replied that the exchange rates between Australia and Nciv Zealand were determined by the respective rates of exchange in Australia on London and Now Zealand on London. If the rates between Australia and New Zealand were brought down to about par, Australians would inevitably obtain large amounts of exchange on London through New Zealand, to the detriment of the Dominion’s resources in London. Mr. O’Brien: “The majority of the banks are prepared to bring the rate down to about par.” Mr. Forbes said previous efforts to maintain a lower rate for trading transactions had been futile. An arrangement had been niado whereby somo advantage would be given to the New Zealand exporter of timber, but it had broken down because it had been found impossible to maintain a special rate of that description. Mr. O’Brien: “1 am assured if pressure is brought to bear on the banks they will bring the rate down to par.” . Mr. Forbes: “I will raise-the question with the banks.”