PURCHASE OF EXCHANGE

New Zealand Herald, Volume LXX, Issue 21520, 17 June 1933, Page 10

PURCHASE OF EXCHANGE

LAST FINANCIAL YEAR EXPLANATION OF COST [BY TELEGRAPH PRESS ASSOCIATION'] "WELLINGTON", Friday '"From various references in the newspapers, there still appears to ba some misapprehension as to the Govern-ment-s exchange transaction," stated the Minister of Finance, tlio Rt_ Hon. J. G. Coates, to-day. 'To' make the position clear, I wish* to state that the London exchange requirements of the Government for interest and other ordinary purposes for the last financial year were fully covered before the question of raising the exchange rate arose. Thus the only additional expense for" 1932-33 arising out of the increase in the rate was —470,000 for the purpose of surplus exchange under the Banks Indemnity (Exchange) Act. ' The amount "of £1,910.000 so purchased was a surplus to the requirements for the last financial year, and an apparent contradiction contained in a recent statement of mine to the effect that the funds taken over from the banks had not so far exceeded the amount needed to" meet the Government s ordinary interest requirements Ii!- /x n ' s cx P' a '"ed by the fact that; his .aiter statement had reference to the current financial year. The exchange that has been purchased under the Banks Indemnity (Exchange) Act will, of course, be used vhere necessary for meeting interest 11,1,1 ol fher normal in London, fop obviously there is no need to make lurther remittances to London while funds are held in that centre. Needless to .say, as the funds purchased under the exchange indemnity arrangement arc? so used, the necessary adjustments will be made in the public accounts "