EXCHANGE RATE

Wairarapa Daily Times, 19 July 1934, Page 4

EXCHANGE RATE

TO BE MAINTAINED. WELLINGTON, Wednesday. A statement that the present rate of exchange on London is to be maintained was made by the Reserve Bank Board to-night. The board’s official statement is as follows: — “In order to dispel the existing uncertainty with regard to the rate of exchange on London, the Reserve Bank of New Zealand announces that, in the absence of unforeseen developments in the meantime, the following rates will be fixed on Ist August in accordance with the terms of Section 16 of the Reserve Bank of New Zealand Act, 3933: “(1) Rate at which sterling will be given for immediate delivery in London in exchange for Reserve Bank notes, £125 New Zealand equals £IOO London. ‘ ‘ (2) Rate at which Reserve Bank notes will be given in exchange for gold or for sterling for immediate delivery in London, £124 New Zealand equal £IOO London.

‘ ‘ The Reserve Bank will aim at retaining these rates unchanged for a long period unless there should be a marked alteration in existing conditions. To assist in achieving this measure of stability, the Reserve Bank will be prepared to enter into forward exchange contracts with the trading banks. The Reserve Bank does not wish to compete for exchange business in the ordinary course, provided adequate facilities are available elsewhere, although it will, of course, be prepared to fulfil its statutory obligations, as indicated above, if requested to do so. The trading banks will be free to formulate their own exchange policy and to fix their own buying and selling rates for London funds. Sterling funds held in London by the Reserve Bank from time to time should be regarded as ultimate monetary reserves of the Dominion, for use in case of need.” — (P.A.)