N.Z. EXCHANGE RATE

Star (Christchurch), Volume XLIV, Issue 490, 27 June 1932, Page 1

N.Z. EXCHANGE RATE

Action by Bank of N.S.W. is Feared. BRITISH PREDICTION. United Press Assn.—By Electric Telegraph—Copyright. (Received June 27, 11 a.m.) LONDON, June 26. The “ Sydney Sun ” learns that fears respecting New Zealand exchange continue. The best-informed circles consider that when the pool regulations are withdrawn the Bank of New South Wales will force the other banks to raise the rate, although market conditions do not justify it. British manufacturers, who . supply 50 per cent of New Zealand imports, fear that an increased exchange will disastrously affect trade. This will mean that the demand on London funds would be reduced, leaving the Bank of New South Wales a present of huge credits available for sale in Australia at a profit of up to 25 per cent, if the New Zealand exchange is brought to the level of Australian exchange. BANKER’S VIEWS. Per Press Association. AUCKLAND, June 27. The Governor of the Commonwealth Bank (Mr E. C." Riddle), who is on his way to Ottawa to represent the bank, discussed the exchange rate question. Mr Riddle said that in order to prevent a breakdown the bank had assumed responsibility in Australia by fixing the price at which it was prepared to buy from the trading banks or the public. This had prevented the collapse of exchange at a time when it appeared inevitable. The bank took the view that it should be guided in fixing the rate entirely by the economic and "financial position at the time. “If a high rate is desired, in order to assist any particular section of the community, we take the view that this is a political matter and one entirely for Government action and responsibility,” said Mr Riddle.