AUSTRALIAN EXCHANGE

New Zealand Herald, Volume LXXI, Issue 21765, 3 April 1934, Page 5

AUSTRALIAN EXCHANGE

ALTERATION UNLIKELY

RESERVE FUND IN LONDON BAD SEASON'S SAFEGUARD [ TJIO.M OUR OWN COIIKKSL'ONDKVr] SYDNEY, March 29 111 spite of specula!ions iu the London press there is little likelihood of any immediate alteration in the ex- | change rate as far as Australia is concerned. It is true that Australia is building up a reserve fund in London, but tliis is necessary to safeguard the position should Australia suffer a bad ' season. Australia has had so many good seasons that people aro wondering how long they will last, and, without being pessimistic, feel the country must bo prepared for the inevitable. The question of bringing the Australian pound closer to English sterling is one that must come into greater prominence as the process of recovery continues, and exchange may become a live issue later in the. year. Authoritative opinion is that a drastic alteration is not likely until world prices of wheat, butter and other primary products have been stabilised on a. payable basis. The Lyons Government h;.\s always held that exchange must not be a political question, and has, as a matter of political policy, taken steps to give tlse Commonwealth Batik Board complete control of exchange movements. The bank would, of course, ascertain tho views of the Government before any important change was made, it is certain that strenuous efforts would be made by country interests to prevent any change, because the pegging of tho Australian pound at 2o per cent below the English pound is working most advantageously to tho exporters of primary products. On the other hand, tho influence of British exporters to Australia will be exerted toward bringing the Australian pound closer to sterling. Under a plan of co-operation with the Commonwealth Bank the credits held by Australian banks in London are "pooled." This earmarks, as a first obligation, £2,500,000 a month for Austrajian Governmental purposes in London. Beceipts from exports normally accumulate in London during the export season which, for 1933-34, is now nearing a close. Usually from May until at least August, the trading pendulum swings over to imports, which exceed exports substantially. It is the duty of the banks to retain adequate funds in London to meet the recurrence of demand on export bills, when it becomes pressing. Australian funds in London fluctuate, therefore. On April 10, 1033, the aggregate was shown at: £19,010,000, and a week later it had been increased to £21,769,000. On November 13 last tho funds were down to £20,000,000, but by the close of the year had grown to £23,000,000, indicating that the ex'port season had returned and was commencing to overtake the import trade. The latest return shows that reserves have grown to £24,763,000. Latest figures of Commonwealth external trade—covering the seven months to .January 31—reveal a surplus of exports representing £28,449,000 sterling. The greater part of that surplus would find its way to tho banks in London, and would be "pooled" in accordance with the arrangements made by the Commonwealth Bank.

CLYDESDALE STALLIONS SALES IN SYDNEY (Received April 2. 11.25 p.m.) SYDNEY. April 2 The auction sales of pedigreed Clydesdale stallions exhibited at the Royal Show attracted a good attendance of buyers to-dav, but prices were adversely affected by the presence of a number of young and plain sorts. Anything pood, however, found a ready market at the" lower levels. Air. .1. M. Smith, of North Otago, submitted Hero Lauder, which brought 120 guineas. Abbotsford Reformer, 170 guineas, and victor Lynn, 250 guineas.