THE MONEY MARKET

Waipa Post, Volume 45, Issue 3250, 3 November 1932, Page 4

THE MONEY MARKET

METHODS COMPARED

Considerable interest will attach to the response of Australian investors to the internal loan shortly to be offered for subscription by the Commonwealth Government. Some discussion of the terms has taken place with bankers at the Premiers’ Conference, the subject being that the Government is seeking a loan of £8,000,000 at 31 per cent with a currency of 10 years. At the same time the New Zealand Government is offering 5 per cent stock for a period of 7 h years. The comparison with respect to both price and period is definitely unfavourable to New Zealand. If the Australian loan is successful, the Federal Government will have given an impressive demonstration of the effectiveness of the steps taken to lower interest rates. Two years ago it was offering stock bearing interest at 6 per cent; to-day with the concurrence of the bankers it is about to invite subscriptions to a3l per cent loan. The New Zealand _ Government would do well to consider these terms along with the much dearer price it is prepared to pay, and to reflect on the effect its bid must have on the local money market.