AUSTRALIAN EXCHANGE.

New Zealand Herald, Volume LXVII, Issue 20690, 9 October 1930, Page 13

AUSTRALIAN EXCHANGE.

SHARP INCREASE MADE. CABLE DRAFTS AT 9 PER CENT. WHOLE TARIFF REVISED. By Telegraph—Press Association—Copyright. (Received October 8. 11 p.m.) SYDNEY. Oct. 8. Following to-day's conforcnco between the general managers of tlio various banks in Australia with the chairman of directors, Sir Robert Gibson, and the governor, Mr. E. C. Riddle, of tho Commonwealth Bank, a new tariff for cxehango between Australia and London was announced.

As from to-morrow, exchange will bo quoted on tho basis of Australian currency against £IOO sterling in London. Tho new rates aro as follows:

AUSTRALIA ON LONDON. Buying. Selling. Telegraphic transfers £IOB 10 0 £lO9 O 0 On demand .. 107 17 0 108 15 0 30 days ™ r.. 107 8 9 108 10 0 GO days ** v.- 107 I :i 10S 5 0 90 days rwv ■.. 100 1!1 9 108 0 0 120 days -,v .• 106 6 3 107 15 0

LONDON ON AUSTRALIA. Buying. Selling. Telegraphic transfers £ >OB 10 0 On demand .. .. £lO9 1G .1 108 17 6 ,')0 days t.. 110 7 6 60 days w r..i HO 18 9 - 90 days r..- HI 10 {j I'2o daya uj w. 112 1 3

Previously the rates wore quoted at a stated premium or discount, as the caso might bo, and it is essential to remember that the new rates are on tho basis of £IOO London.

The essential alteration in tho method of quotation occurs in tho London on Australia tariff. Previously the quotations have shown tho equivalent in London of £IOO Australian; for instance, £93 17s 6d in London would purchase a telegraphic transfer to Australia of £IOO. Under tlie new method, £IOO in London will purchase £IOB 10s in Australia.

Tho rates now superseded have been in operation since March 25, and tho alterations are as drastic as were made then. The selling rate in Australia for telegraphic transfers has been increased from 6£ to 9 per cent., and tho buying rato from 6 1-8 to 8i per cent. There has been a proportionate adjustment in the London rates, for the previous quotation was equivalent to about £lO6 10s 6d as against the new quotation of £IOB _los. The most significant alteration is that the rates for mail transfers have been increased more than those for cable transfers, and the addition is progressive with the length of usance. Thus the buying rate for sight bills in Australia has been increased by £2 10s per cent.; that for 50 days bills by £2 13s 9d and so on. This graduation suggests that a further revision of the tariff may be expected.

TROCESS OF ADJUSTMENT OFFICIAL AND OPEN RATES. CONTROL OF LONDON FUNDS. (Received October 8, 11.30 p.m.) SYDNEY. Oct. 8. A statement was made by Mr. E. C. Riddle, governor of tho Commonwealth Bank, at tho close of to-day's proceedings of tho bankers' conference. He said the only decision reached so far related to the increase in exchange rates to the extent of 2£ per cent, in the telegraphic transfer selling rate. The changes had been made to bring tho rates into conformity with market conditions and to keep exchange business as far as possiblo in the hands of the banks, so that the provision of £36,000.000 for Government purposes in London from the export funds might be accomplished with less difficulty.

There was always a fair amount of exchange business which passed outside the banks, but lately importers, finding themselves rationed in their London finance requirements by tho banks, had sought out exporters and carried out business with them.

Mr. Riddle added that the advantages of theso discussions and efforts toward cooperation were likely to lead to similar banking conferences in future.

The latest issue of the Australasian Banking Record states that a premium of £8 7s 6d per cent, has been paid m the outside market, as against the banks selling rate of £6 10s for telegraphic transfers.