Commentary

Quarterly Bulletin 1968 Q4
Published on 01 December 1968

Most of this Commentary is concerned with the three months from August to October when, after an unsettled beginning, foreign exchange markets became general ly quiet and sterling developed a stronger tone. Confidence was encouraged at this time by the conclusion of arrangements at Basle early in September for a medium-term facility of $2,000 million to counter fluctuations in the sterling balances of sterling area countries; and, shortly afterwards, by the trade figures for August which showed another good rise in exports. These developments made it possible to reduce Bank rate from 7½% to 7% on 19th September. Short-term interest rates in the United Kingdom fell sharply - from their high levels - with the reduction in Bank rate, and mostly continued to decline afterwards. However, the trend in dollar interest rates in October was upwards.

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