HIGH EXCHANGE.

Manawatu Standard, Volume LIII, Issue 26, 28 December 1932, Page 7

HIGH EXCHANGE.

AND CHEAP LOAN REPAYMENT. (Bv Telegraph.—Special to Standard.) WELLINGTON, Dec. 28. One of the most interesting examples of how exchange differences operate in the transmission of money between various countries is given by the Auditor and Controller-General in discussing the .proper treatment of exchange premiums and discounts in the public accounts. The Kfllk of our overseas payments, as they are made in England, are subject to an addition because New Zealand currency stands on a lower plane than English sterling. But the instance quoted relates to debt repayments to Australian holders, and here New Zealand currency being in a superior position, enabled a good profit to be made. Various payments had to be made during the year by the New Zealand Government in Australia. They totalled £360,685 18s 9d in Australian currency, but owing to the rate of exchange being favourable to New Zealand these debts were settled by transmitting £318,897 10s. The difference of £51,787 19s 9d, represented a saving to New Zealand on exchange. Among the items was a loan redemption of £261,900, which was actually made for £224,259. On the other hand the Treasury during the year 1931-32 lost over £4OO in transmitting to the United Kingdom and elsewhere moneys collected in the courts of the Dominion in respect of maintenance payments. These were collected in New Zealand currency, but paid in the United Kingdom in sterling. The sums totalled over £4OOO, and the difference in exchange cost the Government the sum mentioned. In future, all these payments will be made subject to exchange.