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D I V I S I O N OF I N T E R N A T I O N A L F I N A N C E BOARD OF SOVERNORS OF T H E F E D E R A L RESERVE SYSTEM H. 13 No. M a y 6, 147 1964. CAPITAL MARKET DEVELOPMENTS ABROAD I. Japan II. I. Japan: Several and A p r i l . important for and C a p i t a l M a r k e t s economic developments in M a r c h - A p r i l for t h e B a n k of J a p a n i n c r e a s e d to 6 . 5 7 p e r c e n t , requirements c e n t , and Money On M a r c h • 1 8 percentage points deposit Nine Charts on,Financial Markets Abroad and for raw m a t e r i a l s foodstuffs and at the s a m e and Japan occurred its b a s i c time increased industrial machinery specified non-essential imports in M a r c h discount rate 0,73 advance import f r o m 1 to 5 p e r f r o m 5 to 35 p e r cent. T h r o u g h t h e s e , and e a r l i e r m e a s u r e s , J a p a n h o p e s to r e d u c e t h e c u r r e n t pressures on international reserves. O n A p r i l 1 J a p a n m o v e d to an A r t i c l e V I I I status in t h e I M F , national thus m a k i n g transactions. the y e n freely convertible Japan also obtained on April for c u r r e n t intern- 1 a stand-by arrangement w i t h t h e IMF f o r $ 3 0 5 m i l l i o n . L a t e r in t h e m o n t h o n A p r i l 2 8 , J a p a n b e c a m e t h e f i r s t A s i a n m e m b e r o f t h e O r g a n i z a t i o n for E c o n o m i c C o o p e r a t i o n and D e v e l o p m e n t . J a p a n h a s c o n t i n u e d to i n c r e a s e b o t h its s h o r t - and i n t e r m e d i a t e - t e r m d e b t to U . S . b a n k s , as w e l l as f l o a t f u r t h e r s e c u r i t i e s i s s u e s in E u r o p e . In F e b r u a r y , J a p a n ' s s h o r t - t e r m i n d e b t e d n e s s to U . S . b a n k s i n c r e a s e d $ 9 4 m i l l i o n , b r i n g i n g t h e t o t a l i n c r e a s e s i n c e l a s t O c t o b e r to $ 4 4 1 m i l l i o n . ( S e e T a b l e 1). T a b l e 1. Japan: Short- and L o n g - T e r m B o r r o w i n g s Bank loans 1 1 Securi —^ 1960 1961 1962 1963 I II 480 30 722 -58 212 397 200 11 51 118 84 7 60 512 780 597 62 202 53 Short-term liabilities New security Preliminary. in t h e U . S . Change during period 1963 1964 Change during year III - IV 287 _L5 287 Feb. Jan. 74 , 0 a/ 74 a/ 94 J/ 94 0 to U . S . b a n k s . flotations. - D u r i n g M a r c h and A p r i l , J a p a n a l s o r a i s e d $ 4 6 . 9 m i l l i o n in s e c u r i t i e s i s s u e s in E u r o p e . (See T a b l e 6). E u r o p e a n b a n k e r s a r e r e p o r t e d to h a v e i n f o r m e d t h e J a p a n e s e M i n i s t r y o f F i n a n c e that the E u r o p e a n m a r k e t c a n a b s o r b a b o u t $ 5 0 0 million 25 in n e w foreign offerings to 33 p e r c e n t o f the total. million per year. Currently in o f f e r i n g s few m o n t h s every yearly and This would Japan should be be equivalent the M i n i s t r y of F i n a n c e to the b e s t qualified is a l l o w i n g after 6 months) for to $ 1 6 7 about $30 m i l l i o n Japanese borrowers. OFFICIAL USE ONLY (Decontrolled a b l e to a c c o u n t to a b o u t $ 1 2 5 -2- OFFICIAL USE ONLY April J a p a n ' s b a l a n c e of p a y m e n t s c o n t i n u e d to r e m a i n u n d e r p r e s s u r e in as r e s e r v e s fell $ 2 1 m i l l i o n . In M a r c h , the s e a s o n a l l y a d j u s t e d t r a d e balance narrowed large for the s e c o n d at $ 1 2 1 m i l l i o n , On consecutive month, but remained relatively (See T a b l e 4 ) . the d o m e s t i c side, bank credit expanded at a s l o w e r r a t e in January-February. M o n e y m a r k e t c o n d i t i o n s t i g h t e n e d s h a r p l y in M a r c h , b u t s u b s e q u e n t l y e a s e d in A p r i l . T h e s t o c k m a r k e t c o n t i n u e d to r e m a i n d e p r e s s e d through early May. Money market. Money market conditions tightened in M a r c h , b u t w e r e s u b s t a n t i a l l y e a s i e r d u r i n g m o s t of A p r i l . A net expansion of B a n k of Japan c r e d i t in M a r c h o f ¥ 5 6 b i l l i o n w a s m o r e t h a n o f f s e t b y the c o n t r a c t i o n a r y i m p a c t of a ¥ 5 0 b i l l i o n i n c r e a s e in b a n k n o t e s in c i r c u l a t i o n and net T r e a s u r y receipts of ¥ 3 3 billion. Interest rates. Call loan rates rose in M a r c h d u e to the i n c r e a s e ^ in tbfej^ank of J a p a n ' s b a s i c d i s c o u n t r a t e b y 0 . 7 3 p e r c e n t a g e p o i n t s o n M a r c h 18 and a _ ^ e a s o n a l l y h e a v y d e m a n d for f u n d s as f i r m s w i n d o w - d r e s s e d t h e i r b a l a n c e s h e e t s T/ate in M a r c h , the end o f the f i s c a l y e a r for m a n y f i r m s . T h e r a t e for unconditional ( r e p a y a b l e at a day's n o t i c e ) call "'per. c e n t e a r l y in M a r c h to 9 . 8 5 5 p e r c e n t and s u b s e q u e n t l y to 1 0 . 2 2 0 p e r c e n t l a t e r d e c l i n e d to 9 . 1 2 5 p e r c e n t call loan rates changed by loan money increased from 8.760 afteir t h e h i k e in the d i s c o u n t r a t e , in the m o n t h . On A p r i l . 1 , the rate and r e m a i n e d at t h a t l e v e l t h r o u g h A p r i l 25. Other the s a m e p e r c e n t a g e a m o u n t s at t h e s a m e t i m e d u r i n g this p e r i o d , The average interest rate for b a n k l o a n s and d i s c o u n t s w a s 6.67 per c e n t in J a n u a r y , the s a m e as in D e c e m b e r . (See T a b l e 2). B e c a u s e of the b o o s t in t h e B a n k o f J a p a n ' s b a s i c d i s c o u n t r a t e , t h e F e d e r a t i o n o f B a n k e r s ' Associations of Japan of c o m m e r c i a l b a n k Table 2, approved interest Japan- for e x p o r t 23 in t h e g e n e r a l 1960 1961 September 8.18 8.28 8.06 8.21 8.22 8.14 7.92 7.88 8.00 December 8.11 8.08 8.20 structure trade bills. Interest Rate on Bank Loans 1959 - and Discounts 1962 1963 1964 8.22 8.23 7.92 7.75 7.68 7.67 1 / 8.24 8.09 7.67 January„ Bank at except Average Monthly March June 1/ an i n c r e a s e o n M a r c h rates a slower in F e b r u a r y loans rate and d i s c o u n t s . than a year 1963. Bank credit in F e b r u a r y c o n t i n u e d earlier, rising 0.7 per In J a n u a r y , cent the r a t e of e x p a n s i o n w a s as a g a i n s t also much to increase 1.9 p e r slower cent than a year earlier. T h e s l o w e r r a t e o f e x p a n s i o n r e f l e c t s the m e a s u r e s o f m o n e t a r y r e s t r a i n t t a k e n in D e c e m b e r and J a n u a r y . L o a n s and b i l l s d i s c o u n t e d r o s e in F e b r u ary but h o l d i n g s of securities declined. Deposit OFFICIAL USE O N L Y liabilities rose 0.3 per cent. OFFICIAL USE ONLY Bank of J a p a n " w i n d o w g u i d a n c e " r e s t r a i n t s on c o m m e r c i a l b a n k lending w e r e not fully e f f e c t i v e in the first quarter, The 13 large city banks -exceeded their " l o a n q u o t a s " by ¥ 1 2 . 2 b i l l i o n or 5,2 per cent. The three longterm credit b a n k s exceeded their " q u o t a s " by ¥ 1 . 1 b i l l i o n or 1-6 per cent. The p r o p o r t i o n of b a n k loans and d i s c o u n t s e x t e n d e d for p u r c h a s e s of e q u i p m e n t rose to 16.9 per cent in F e b r u a r y as against 16,8 per cent in January, T h i s c o m p a r e s w i t h a c y c l i c a l low of 16.3 per cent in M a r c h of 1963, In A p r i l the M i n i s t r y of F i n a n c e and the Bank of J a p a n b e g a n an i n t e n s i v e e x a m i n a t i o n and study of the c o m p e n s a t o r y b a l a n c e r e q u i r e m e n t s of commercial banks. T h e G o v e r n m e n t is anxious to h a v e b a n k s r e d u c e or e l i m i n a t e these r e q u i r e m e n t s in o r d e r to b r i n g the real rate of interest closer to the level in W e s t e r n m o n e y and c a p i t a l m a r k e t s . It is not y e t c l e a r , h o w e v e r , h o w s u c c e s s f u l this p r o g r a m w i l l be, and the p r o g r a m u n f o r t u n a t e l y m o v e s in the o p p o s i t e d i r e c t i o n of the c u r r e n t tight m o n e y p o l i c y . Bond m a r k e t . New issues of d o m e s t i c b o n d s totaled ¥ 1 3 7 b i l l i o n in F e b r u a r y , up ¥ 7 b i l l i o n from the low J a n u a r y level, New issues of public corp o r a t i o n b o n d s totaled ¥ 3 6 b i l l i o n , or ¥9 b i l l i o n h i g h e r than a m o n t h e a r l i e r . and new issues of b a n k d e b e n t u r e s w e r e up ¥1 b i l l i o n to ¥ 7 7 bi-llion in F e b r u a r y , Issues of i n d u s t r i a l d e b e n t u r e s w e r e ¥ 2 4 billion,, down ¥ 3 b i l l i o n from the J a n u a r y level, A v e r a g e y i e l d s in F e b r u a r y on local g o v e r n m e n t securities, public corp o r a t i o n b o n d s ; and o n e - y e a r b a n k d e b e n t u r e s r e m a i n e d the same as in January and in 1963 at 7.354,, 7,053, and 6 , 2 2 4 per-ceht. r e s p e c t i v e l y . Y i e l d s on l o n g e r - t e r m bank d e b e n t u r e s w e r e 7,283 per cent in F e b r u a r y , u n c h a n g e d from the J a n u a r y level. and y i e l d s on i n d u s t r i a l b o n d s eased s l i g h t l y from 7,482 per cent in J a n u a r y to 7,477 per cent in F e b r u a r y , Stock m a r k e t . Stock p r i c e s eased d u r i n g the first h a l f of M a r c h and on M a r c h 18 (when the Bank of Japan increased its basic d i s c o u n t r a t e ) they w e r e o n l y s l i g h t l y above the p r e v i o u s low for the y e a r of ¥ 1 , 2 0 4 on J a n u a r y 4 During the rest of M a r c h and in e a r l y A p r i l the m a r k e t r e c o v e r e d m o d e r a t e l y but then sank to a new low for the y e a r of ¥ 1 , 2 0 3 on A p r i l 9 By M a y 4, the average had m o v e d up to ¥1> 246, . T a b l e 3, F e b r u a r y 24 March 2 9 16 23 30 Dow Jones A v e r a g e of 225 Stocks, First S e c t i o n of T o k y o E x c h a n g e ¥1 ,264 1.>254 1 ;,263 1..221 1 ;,214 1,215 April May 6 13 20 27 4 ¥1,211 1. 217 1,222 1,217 1,246 O F F I C I A L USE O N L Y 1963 High Low ¥1 ,634 ¥1 , 201 1964 High Low ¥ 1.,338 ¥1.,203 O F F I C I A L USE O N L Y -4- F o r e i g n trade. The s e a s o n a l l y adjusted trade deficit n a r r o w e d in M a r c h for the second c o n s e c u t i v e m o n t h to $121 m i l l i o n . E x p o r t s rose 4 per cent and imports fell 5 per cent= A l t h o u g h less than the u n u s u a l l y large deficit in January of $ 2 4 4 m i l l i o n , the M a r c h trade gap w a s still s u b s t a n t i a l , being $1,5 b i l l i o n at an annual rate, The trade figures (monthly, or m o n t h l y averagesi on a c u s t o m s b a s i s ) in T a b l e 4 are b a s e d on seasonal a d j u s t m e n t factors c o m p u t e d by the Board of G o v e r n o r s . o f the F e d e r a l R e s e r v e System. I T a b l e 4, Japan: 1962 II III IV Imports Exports 494 378 468 408 452 428 464 419 Balance -116 - 60 - 24 -. 99 Seasonally Adjusted Foreign Trade (in m i l l i o n s of d o l l a r s ) I II III IV I Jan Feb. Mar, 488 415 545 442 582 462 643 489 659 U79 689 445 659 486 628 507 - 73 -103 -120 -154 -180 -244 -173 -121 E f f e c t i v e A p r i l 1,, J a p a n r e p l a c e d its foreign e x c h a n g e a l l o c a t i o n system w i t h an " i m p o r t q u o t a s y s t e m , " G o o d s w e r e f o r m e r l y imported under three s e p a r a t e a r r a n g e m e n t s ; a u t o m a t i c a p p r o v a l (AA)<, a u t o m a t i c fund allocation (AFA), and fund a l l o c a t i o n (FA), The A A has b e e n d i s c o n t i n u e d and the A F A and F A h a v e b e e n r e p l a c e d by a u t o m a t i c import q u o t a (AIQ) and import q u o t a (IQ), r e s p e c t i v e l y , A c o m p r e h e n s i v e import b u d g e t w i l l no longer be c o m p i l e d and only a n e g a t i v e import list w i l l be used for e i t h e r limiting specific imports (IQ s y s t e m ) or a l l o c a t i n g e x c h a n g e on a v i r t u a l l y a u t o m a t i c basis (AIQ system), F o r e i g n r e s e r v e s and c a p i t a l flows, I n t e r n a t i o n a l r e s e r v e s rose $15 m i l l i o n in M a r c h but fell $21 m i l M o n in A p r i l , Since M a r c h , Japan's IMF gold tranche p o s i t i o n of $ 1 8 0 m i l l i o n h a s b e e n included in the o f f i c i a l r e s e r v e s . End of Period 1964 1/ Jan, Feb, Mar, Apr Old Basis $1,855 1,801 1,816 1,795 Includes Japan's New B a s i s J V million million million million IMF gold $2,035 1,981 1,996 1,975 million million million million Change -$23 -$54 +$15 -$21 million million millionmillion tranche p o s i t i o n of $ 180 m i l l i o n . T h e G o v e r n m e n t r e c e n t l y reported that the r e s e r v e figure for the end of M a r c h e x c l u d e s $375 m i l l i o n in G o v e r n m e n t foreign e x c h a n g e on d e p o s i t w i t h J a p a n e s e f o r e i g n e x c h a n g e b a n k s and $84 m i l l i o n in b i l a t e r a l account c r e d i t s . Reserves h a v e g e n e r a l l y been d e c l i n i n g since last O c t o b e r w h e n they r e a c h e d a p e a k of $1,922 million. O F F I C I A L USE O N L Y O F F I C I A L USK O N L Y T h e b a l a n c e of p a y m e n t s exchange current transactions basis, was in F e b r u a r y . Net capital s i s t i n g of $ 3 9 m i l l i o n receipts in n e t account $99 m i l l i o n -5- deficit, in M a r c h as m e a s u r e d compared o n an to $ 1 3 1 m i l l i o n at $ 1 1 9 m i l l i o n w e r e r e l a t i v e l y h i g h long-term receipts and $ 8 0 m i l l i o n in n e t term receipts, In F e b r u a r y , n e t c a p i t a l r e c e i p t s w e r e $ 8 5 m i l l i o n . r e s e r v e s i n c r e a s e d $ 1 5 m i l l i o n in M a r c h , w h i l e r e c o r d e d net r e c e i p t s $20 million, errors According and o m i s s i o n s short- Since totaled t o t a l e d $5 m i l l i o n . to p r e l i m i n a r y d a t a , banks increased $94 million November-February, Japanese con- Japanese short-term liabilities in F e b r u a r y . D u r i n g the f o u r - m o n t h liabilities increased $441 million. to U . S . period (See T a b l e 5 below). Short-term Claims by U.S. Banks on Japan T a b l e 5. (in m i l l i o n s o f U . S . Feb Jan. Apr. Mar. May June dollars) July Aug. Sept. Oct. Nov. Dec. 168 175 204 224 242 260 256 269 262 262 275 324 362 372 420 250 488 467 586 628 693 711 806 1961 875 1,069 1,196 1,762 1,341 1,292 1,528 1,896 1,793 1,862 1,710 1,876 1,662 1,876 .1,765 1,872 1,711 1,697 1,758 1,869 1,335 1,767 1,281 1,601 1,159 1,775 1,272 1962 1963 952 1,685 660 1,288 l,74(k 2,149 1964 2,2235/ 1959 1960 1,778 1,691 , 1,751 2,317— NOTE• Data a/ i n i t i a l l y as of D e c e m b e r Preliminary. for 1962 and 1963 have been revised In m i d - A p r i l 31, and include $52 million 1,995 reported by b a n k s 1961. the c i t y of Tokyo, f l o a t e d a $22.5 million bond issue in Europe. A n A m e r i c a n u n d e r w r i t i n g f i r m p a r t i c i p a t e d in t h i s i s s u e and it h a s b e e n l i s t e d o n the N e w Y o r k S t o c k E x c h a n g e . T h e i s s u e , h o w e v e r , is n o t r e g i s tered w i t h U.S. in the U S . By f l o t a t i o n of S e c u r i t i e s and E x c h a n g e C o m m i s s i o n , and it w i l l n o t be sold t h i s d e v i c e , A m e r i c a n u n d e r w r i t e r s s t i l l p a r t i c i p a t e in t h e foreign dollar bond issues, and they hope k e e p the d o o r o p e n for d i r e c t i s s u e s in the U . S . o n c e action on the interest e q u a l i z a t i o n tax. T a b l e 6, Japan: that L o n g - T e r m B o r r o w i n g s , in E u r o p e R e p o r t e d B a n k of T o k y o $ 7.0 m . Jan. 1962 in F i n a n c i a l a/ Press— Markets Terms Two 5-yr. credits Swiss banks 5-3/4% in Sw from 3 at 5 - 1 / 2 francs. and Prefecture Osaka City to completed Capital Month Floated Amount Osaka City this w i l l help Congress has $25.0 m. Feb. $25.0 m. March 1962 6-1/2%, DM bond issue. Germany 6-1/2%, DM bond issue. Germany and Prefecture 1963 OFFICIAL USE ONLY OFFICIAL USE ONLY Table 6e (cont,) L 5 mill. of Japan Capital Month Floated Amount Borrower Gov't, -6- Aug. Markets Terms 1963 ($14.5 m . ) 6%, US dollar, U.K. 20-25 yrs., 1899 c o n v e r s i o n of bond issue. T a k e d a Chemical Co. $15.0 m. Dec. 1963 6 % , U S d o l l a r , 20 y r . vertible debentures. Canon C a m e r a Co. $ 5.0 m. Dec. 1963 6-1/4%,US Luxembourg con- U.K. d o l l a r , 15 y r . convertible debentures. O s a k a C i t y and $25.0 m. Prefecture Gov't, of Japan Jan. 1964 6-1/27=, D M , issue. Germany 15 y r . b o n d Feb. 1964 5.5%, $ 1 0 . 0 mv Mar. 1964 6 - 1 / 4 % , U S d o l l a r , 20 y r . convertible debentures. Luxembourg C.. $10.0 m Mar. 1964 6 - 1 / 4 % , U S d o l l a r , 20 y r . convertible debentures. London $ 4 . 4 m. Mar. 1964 Equity London I t o h & Co, T a i s h o M a r i n e and F i r e Ins, Co. Sw F r a n c s , Switz. $11.5 m. Teijin Ltd. issue (London Deposi- tary Receipts), at $ 0 . 2 2 p e r Metropolis • a/ this Although Late in F r a n c e for from list in M a r c h a $1,013 million participants Bank 1964 20 m i l . shares share. 5-3/4%, US dollar, 15 y r . Europe guaranteed dollar bonds. to b e c o m p l e t e , s o m e i s s u e s m a y h a v e b e e n o m i t t e d . exclusively and E u r o p e a n b a n k s . the W o r l d Apr. is b e l i e v e d investing Investissments, French $22.5 m. of T o k y o 10-15 yrs. include On April (5 m i l l i o n F r e n c h in J a p a n e s e the Industrial 22, to f i n a n c e p a p t o f francs) securities. firm was Entitled B a n k of Japan, Japan also obtained and v a r i o u s a $!~r m i l l i o n a toll e x p r e s s h i g h w a y formed Japon loan between Toyokawa and K o m a k i . Foreign which led to strengthened an exchange. increased between March Pr/marily because of w i n d o w - d r e s s i n g demand for y e n , 7/and March 27. the rate During in the operations spot m a r k e t this period the spot m i d d l e r a e f e l l f r o m ¥ 3 6 2 . 3 5 to tfte d o l l a r to ¥ 3 6 1 . 0 0 to t h e d o l l a r . S i n c e the t h r e e m o n t h forward r a t e remained r e l a t i v e l y u n c h a n g e d , the forward discount w i d e n e d from and .14 to 1.61 the d i s c o u n t April per cent, j After March 27, the y e n w e a k e n e d narrowed- feo .17 p e r c e n t o n A p r i l 15, OFFICIAL USE ONLY 9 where in the spot m a r k e t it r e m a i n e d through OFFICIAL Table 7. Three-month spot m i d d l e rate March 28 6 362.48 362.35 362.48.362.50 362.45 13 362.30 361.90 361.00 3 10 15 forward middle rate 362.35 21 27 April -7- C u s t o m e r 1 s T.T. Exchange R a t e of Bank of T o k y o , Japan: Yen-doliar February USE O N L Y Forward Chart 1.61 362.00 362.45 .50 362.30 362.30 362.45 .17 362.45 .17 Nine Charts on Financial Markets Abroad 1 - Interest Arbitrage, United States/Canada 2 - Interest Arbitrage, New York/London Chart 3 - Interest A r b i t r a g e for G e r m a n C o m m e r c i a l Banks Chart 4 - Interest Arbitrage, Frankfurt/London Chart 5 - Short-term Interest Rates Chart 6 - Long-term Bond Yields Chart 7 - Industrial Stock Indices Chart, 8 - Spot E x c h a n g e R a t e s - M a j o r C u r r e n c i e s Against U.S. Dollar 9 - 3-month Forward Exchange Rates .14 .22 .61 362.45 Chart Chart discount in p e r c e n t per annum A s i a , A f r i c a and L a t i n A m e r i c a S e c t i o n . II. in T o k y o OFFICIAL USE ONLY I N T E R N A T I O N A L M O N E Y M A R K E T Y I E L D S FOR U . S . D O L L A R I N V E S T O R S 3 - M O N T H EURO D O L L A R DEPOSIT VS. CERTIFICATE OF DEPOSIT Wednesday Ii9 YIELDS DIFFERENTIAL: EURO-DOLLAR OVER U . S . C E R T I F I C A T E OF D E P O S I T N E W Y O R K OFFER RATES O N SELECTED 3 - M O N T H I N V E S T M E N T S Friday l i g a n t T R E A S U R Y BILLS- F u l l y H e d g e d COMMERCIAL PAPER-Fully H e d g e d U.K. HIRE PURCHASE I > Mar. Jim. 1963 5 Sept. A ' % Dec. Mar. J»i. 1964 Sept. . Dtc. Chorl 2 INTEREST A R B I T R A G E , U N I T E D STATES / CANADA Per c e n t p e r a n n u m Thursday figures -i 1 1 r r 3 - M O N T H T R E A S U R Y BILL RATES UNITED STATES I : I I I f T I I I I RATE D I F F E R E N T I A L A N D F O R W A R D C A N A D I A N D O L L A R IN FAVOR OF CANADA + / — i 1 1 : r i i i FORWARD RATE Discount — r r — — i r RATE D I F F E R E N T I A L W I T H F O R W A R D E X C H A N G E C O V E R !. I I NET INCENTIVE IN FAVOR OF CANADA .1 - I . . L . U W 1.! ) i 1. j. J . i . i. i \ J - L . L i . J s D M I S + J LI J 1 J. j..il LLl.ll I M J 19 63 S D * LI J "44 II II $ 6 2 x \° INTEREST ARBITRAGE, 3-MONTH TREASURY NEW Bill YORK/LONDON RATES ~] U.K. LOCAL AUTHORITY DEPOSITS LONDON RATE DIFFERENTIAL AND 3-MONTH FORWARD STERLING SPREAD IN FAVOR OF LONDON RATE DIFFERENTIAL WITH FORWARO EXCHANGE COVER IN FAVOR OF LONDON IN FAVOR OF NEW YORK 1 . 1 . L 1 . j...! - I . : I i.i .l i.-l-i-1- I N T E R E S T A R B I T R A G E FOR G E R M A N C O M M E R C I A L B A N K S 3 M O N T H TREASURY B I L L S . I N T E R B A N K L E N D I N G RATE A N D E U R O D O L L A R D E P O S I T RATES I E U R O D O L L A R LONDON / GERMAN TREASURY BILLS RATE D I F F E R E N T I A L A N D F O R W A R D D E U T S C H E M A R K FORWARD RATE DISCOUNT ( - ) 7 I T RATE D I F F E R E N T I A L W I T H F O R W A R D E X C H A N G E C O V E R NET INCENTIVE. IN EAVOR Of f RANKf URT 1 + ) INTERBANK LOAN RATE I- Chan 5 SHORT-TERM INTEREST R A T E S * f U R Q - D O l U R - 10ND0N — \— >cVuY/- ViiZ— rwz< "X" 3 month If r a t u r y bill f nl et f or till t n u n l m n * i r Apl I n o ti n -J- 3 month role for U S dollnr deooiiH in 1 ondon ( A v *r n a r n n li n nti loo nt and ditc on nls l " ! L O N G - T E R M B O N D YIELDS JJJJJ v\n 1 A A L L 1J J. 1_LJ 1 1 _ L L L L 1962 c^-' 7 ; INDUSTRIAL STOCK INDICES • 1958=100 " f/\ Now t e n e t Swiss Bonk Corporation industrial slock mde * * Japan- mde* of 2 2 5 industrial and other stocks traded on f he Tokyo exchange Rotio s c o l » '• S P O T E X C H A N G E RATES - M A J O R CURRENCIES A G A I N S T U.S. DOLLAR P., Above Above ITALIAN I I RA j W - V i I par par 3 - M O N T H F O R W A R D E X C H A N G E RATE Friday figures A G A I N S T U.S. DOLLARS Per cent per annum A G A I N S T POUND STERLING - L O N D O N PREMIUM 4 - SWISS FRANC DISCOUNT A G A I N S T P O U N D STERLING - L O N D O N PREMIUM + .. BELGIAN FRANC FRENCH FRANC J J i T T . 7 1
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