THE EXCHANGE RATE

New Zealand Herald, Volume LXXIII, Issue 22463, 6 July 1936, Page 8

THE EXCHANGE RATE

In the same breath with which he repeats the Government's intention to " remove" the high exchange rate at " the proper time," the Prime Minister gives a clear indication that the promised move is still some distance ahead. He says the exchange will not be reduced until his Government can arrange the alternative of guaranteed prices for all exported produce. That extension will take time. So far only dairy produce is provided for under the guarantee scheme and the Minister of Finance has stated that " it is not proposed to bring any more products within the marketing scheme this year." That allows a margin of six months at least, and probably of the whole of the forthcoming export season, before the Government proceeds to enlarge its scheme. Hence the exchange rate may be expected to remain stationary for some considerable period. Mr. Savage would have done better to have said so explicitly, instead of once again unsettling exporters and importers by his talk of changes in the future. He could have assured them that there would bo no alteration this year, or until the end of the new export season, and so encouraged them to proceed with their business confidently. To remove the exchange rate now would be most unfair to all those farmers outside the dairy industry. They still have to sell in unsheltered markets and will shortly have to meet higher costs for labour and most other essentials. If at the same time the exchange rate were moved against them, they would be mo'st seriously affected and many would not be able to carry on.