EXCHANGE PROBLEM

New Zealand Herald, Volume LXX, Issue 21411, 8 February 1933, Page 5

EXCHANGE PROBLEM

TRANSFER FROM AUSTRALIA NEW ZEALANDERS' MONEY EMBARRASSING, POSITION [from our own correspondent] SYDNEY, Feb. 2 Australian banks and other financial concerns in the Commonwealth are eagerly awaiting a further announcement by the New Zealand Government relative to its exchange policy. The decision to raise the rate of exchange continues to puzzle many people, especially as the Government had stated quite recently that it would not interfere with the rate then existing.

The efforts of New Zealand intei-ests to repatriate large balances which they have been holding in Australia have created an embarrassing position. Since the alteration of the exchange rate the Australian banks have been, flooded with applications for transfers to New Zealand, and the outcome has been a restriction of exchange dealings and the alteration of the Australian selling rate to "irregular." Most of the business done by the banks this week has been confined to their own customers.

New Zealand funds have been accumulating in for some considerable time. Rather than face the loss occasioned by the previous" rate of exchange, which meant the payment of £ll4 7s 6d in Australian currency for £IOO in New Zealand currency, many people have been holding balances in Sydney and elsewhere in the hope of a favourable alteration in the rate. Now that the two currencies are virtually at par, there has been a rush to repatriate the money.

The Bank of New South Wales announced on Monday that its quotations, Sydney on New Zealand, were buying £99 15s, selling'"irregular." The previous quotation was, buying £99 16s, selling £IOO 10s. The banks, it is understood, are selling New Zealand money only to customers who have had previous dealings with them: It is suggested that the position would be relieved somewhat if the New Zealand Government decided to buy all the money offering, for whatever purpose it was being transferred. The opinion was expressed in banking circles in Sydney that even if the New Zealand Government decided to buy only London funds, holders of balances in Australia might suffer a loss amounting to about 10s per cent, involved in a transfer via London, rather than hold their money any longer in the hope of unrestricted dealings direct with Australia.