RATE OF EXCHANGE

Otago Daily Times, Issue 22286, 12 June 1934, Page 10

RATE OF EXCHANGE

POSSIBILITY OF ALTERATION SPECULATION IN THE NORTH ( Peb United Press Association.) AUCKLAND, June 11. Speculation concerning a possible alteration in the exchange rate on London received a fillip in Auckland to-day when a cablegram was received from London stating that “ the agreement between the Government and the banks has been renewed for a further six months, and there will be no immediate alteration in the exchange rate.” Although the cablegram was explicit enough in its terms a knowledge of the background of the exchange negotiations between the Government and the banka caused the Auckland recipients to doubt whether the message meant exactly what it said. A cablegram was despatched seeking further information. It was suggested that the agreement referred to the Government’s guarantee to the banks against loss on their exchange operations, but it was pointed out that the Banks Indemnity (Exchange) Act does not impose any limit as to the duration of the guarantee. When the message was referred to the Prime Minister (Mr Forbes) in Wellington to-night, he said he was at a loss to understand it. Mr Forbes said there was nothing in the Act concerning n time limit. There was no need for the renewal of any agreement, and the present position would continue until other arrangements were made. The announcement by the Government that it was not intended to alter the exchange rate during the current season of production was recalled to Mr Forbes’s mind.

“ But that does not mean that it will be altered either way at the end of the season,” he replied. “■ All we did was to give an assurance to the wool buyers that the rate would not be altered while they were operating.”