BANK RATE REDUCED.

New Zealand Herald, Volume LXIX, Issue 21130, 12 March 1932, Page 11

BANK RATE REDUCED.

EXCITEMENT IN LONDON.

RUSH TO SPREAD NEWS.

HELP TO BUSINESS MEN. By Telegraph—Press Association—Copyright. LONDON, March 10. The Bank of England rate of discount was reduced to-day from 5 per cent, to 4 per cent. The announcement was wildly cheered by excited crowds of people in the streets who disorganised the traffic as tliey rushed headlong to telegraph and telephone offices to advise interested parties. The reduction will help business men to carry stocks of commodities on borrowed money and make possible (he maintenance of and even a much-needed improvement in commodity prices.

The London stock market did not react to tho lower bank rate as it had been already discounted during the week.

The fall in the London bank rate is tho second since it was increased to 6 per cent, on September 21, simultaneously with the suspension of gold payments by the Bank of England. The earlier reduction, on February IS, followed the repayment on the first of tho month of the £30,000,000 due in equal parts to the Federal Reserve Bank of New York and the Bank of France. The rate has some distance still to fall before it reaches the level ruling in the earlier part of last year. It was reduced to 2j per cent, on May 14, but was raised to per cent, on July 23 and to per cent, a week later, these movements reflecting the financial crisis resulting from the European situation. Following is a summary of the bank rates in force in the principal foreign financial centres, showing the date and character of the last change in each case:— Change From To Amsterdam . . Sept.. 20 2 3 Berlin . . Mar. 8 7 O Brussels . . Jan. 13 2i .'if New York . . Feb. 2G 31 3 Paris . . . . Oct. 9 2 2i Switzerland . . * -J 2 * Jan. 22. 1931. The lowest rate in force is 2 per cent, in Switzerland. The Brussels rate was raised on January 13 from 2i to 3i per cent, after having stood at the former figure since July 31, 1930. EFFECT IN AUSTRALIA. TRADING BANKS' RATES. PURCHASE OF STERLING. (Received March 11, 11.45 p.m.) SYDNEY, March 11. As a result of the reduction in the London bank rate the trading banks in Australia have adjusted the rates at which they will buy sterling for all usances except telegraphic transfers The "on demand " rate has been increased by 2s 6d and other usances have been increased by amounts ranging to 12s 6d.

The basic rate of exchange on tele graphic transfers is unchanged.