BANK RATE LOWERED

Taranaki Daily News, 20 February 1932, Page 5

BANK RATE LOWERED

REDUCTION TO 5 PER CENT WIDESPREAD SATISFACTION PLEASANT SIGN OF; TIMES GILT-EDGED STOCKS RISE By Telegraph—Press Aasn.—Copyright. London, Feb. IS. The bank rate has been reduced from 6 per cent, to 5 per cent. The reduction is hailed with widespread satisfaction. It is considered, in conjunction with. the repayment of French and American credits, as an indication of a welcome improvement in the international financial position.

The Bank of England rate of discount was 6 per cent., to which it was increased on September 21 from 4J per cent. This week short loans were quoted at 5 per cent., compared with 4| per cent, last week. The market rate of discount for best three months’ bills was 5i per cent., as compared with 5 per cent, last week.

STIMULATING EFFECT IN LONDON.

STOCK EXCHANGE BRIGHTENS. British Official Wireless. Rec. 5.5 p.m. Rugby, Feb. 18. The reduction in the bank rate from 6 to 5 per cent, has had a stimulating effect in the city, and on the stock exchange. It is the first reduction made since Britain left the gold standard five months ago. The change came as a pleasant surprise, and business received an immediate stimulus, w’hile stock prices generally were marked up. The outstanding feature at the close of the exchange was the substantial gains registered by all leading gilt-edged specialities. These included war loan 5 per cents., which rose f to 992, the funding loan of 4 per cent, which rose 1 3-8 to SS 5-8, and the consolidated 4 per cents., which rose 1 3-8 to 86 3-6.

Mr. Walter Runciman, president of the Board of Trade, speaking at a Chamber of Shipping dinner, said he had heard of a reduction in the bank rate, which would afford relief far exceeding a 1 per cent, drop, especially regarding industry generally and taxpayers who had borrowed to pay their taxes.