FRENCH DEVALUATION OF FRANC BECOMES LAW

Wanganui Chronicle, 27 January 1948, Page 5

FRENCH DEVALUATION OF FRANC BECOMES LAW

JOINT STATEMENT SHOWS THAT BRITAIN HAD DISAGREED

(N.Z.P.A. —Copyright.) Received 7.30 p.m. LONDON, Jan. 26 Devaluation of the French franc became law today with the publication of the decrees in the Journal Official (the French equivalent of the London Gazette).

A joint communique from the British and French Governments, issued in London and Paris, recorded disagreement on the French decision on a free exchange market in hard currencies, but declared that close technical co-operation would begin immediately to minimise repercussions on commercial relations between the sterling and franc areas.

The communique stated that although the British and French viewpoints about France’s monetary project did not coincide during the Mayer-Cripps conversations in Loudon and Paris, the conversations made clear the frank and intimate character of Anglo-French relations. The French Government presentee proposals to the International Monetary Fund at Washington and explained that they were the only way of meeting the present economic exigencies. They were not intended to be permanent, but a step towards currency stabilisation on the basis of a single exchange rate, which was the object of the Government’s policy. Britain put to the Fund the same objections as Sir Stafford Cripps had put to M. Mayer, the French Finance Minister. The two Governments noted the International Moneiary Fund’s statement, published yesterday. The British Government associated itself with it. Stating they wish to continue close co-operation, the communique says, the two Governments have the same objectives in this spirit of mutual comprehension close technical co-operation will begin immediately.” NEW RATE IN FORCE. In Paris. M. Mayer announced that as from today the purchasing price of all foreign currencies would be increased by 80 per cent., compared with the present exchange rates. Reading the announcement, he said that part of France’s foreign trading might be at the free exchange rate, as a tradition to completely free money values. France regretted that the Monetary Fund had not been able to approve the entire measure. The communique promised that France would do everything in its power not to hinder other European countries which were also seeking to preserve their monetary systems. Only the United States dollar and the Portuguese escudo would be on the free market in the meantime. M. Mayer said that tourists would benefit from the free market in dollars and escudos. Other currencies might be admitted to the free market later. Exporters would surrender half their foreign exchange at the official rate and would be allowed to dispose of the other half in the free market. Buyers in the free market must operate through approved agents, and have an import licence or equivalent currency certificate. Everybody could sell foreign exchange in the free market. M. Mayer said the free money market would be fed by half the foreign exchange revenue derived from French exports. The other half would go into the Government's monetary stabilisation fund. The franc would be allowed to find its own level on the free market, then complete devaluation would follow. The currencies of the French territories in the Pacific and tne French rupee would remain unchanged.