EXCHANGE RATE.

Star (Christchurch), Volume LXVI, Issue 20329, 12 June 1934, Page 5

EXCHANGE RATE.

Speculation Over London Message. POSSIBLE ALTERATION. Per Press Association. AUCKLAND, June 11. Speculation concerning possible alteration in the exchange rate on London receded a fillip in Auckland to-day, Avhen a cablegram Avas receiA-ed from London stating, “Agreement between Government and banks been renewed for further six months and there will be no immediate alteration in the exchange rate.” Although the cablegram Avas explicit enough in its terms knowledge of the background of the exchange negotiations betAveen the Government and the banks caused Auckland recipients to doubt Avhether the message meant exactly what it said and a cablegram was despatched seeking further information.

It Avas 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 Avas 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 a time limit. There Avas no need for reneAval of any agreement. The present position continued until other agreements 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 Avay at the end of the season,” he replied. “All we did was to giA-e an assurance to wool buyers that the rate Avould not be altered while they Avere operating.”