Chinese national dollar experienced another slump in Shanghai yesterday, opening at 5d. and closing at the nominal rate for sellers at 4%d. for sterling after a day of extreme uncertainty. While the opening rate encouraged people to believe that the decline had been checked and some sort of stable rate could be maintained at that figure, during the day there developed a weakness which manifested itself in a new record with no indication that there will be any improvement today.
The exchange market opened with sellers to merchants at 5d. for sterling and 911 for US. dollars, but extreme weakness marked the interbank -market. Forward rates were weak and ultimately this weakness was reflected in spot rates. There were reactions during the morning 43d. being quoted shortly before noon, but the afternoon revealed a trend of uninterrupted weakness, and at the close there were purely nominal sellers at 4%d. for sterling and 8% for U.S. dollars cash, and Jad. for sterling and 8% for US. dollars for July.
Faced with mounting prices and a big increase in commodities, there was extreme pessimism in Shanghai yesterday. This was reflected in Chinese banking operations in regard to northern notes which, hitherto, have not been cashed in large quantities. A large number of foreign, Sikh and Chinese members of the S-MP. turned out early yesterday morning to prevent a huge crowd of Chinese who were waiting for the opening of the Bubbling Well branch of the Bank of Communications, from leaving the pavement and thus disturbing traffic. When the banks doors opened for business, an excited cry went up from the throng as they were ordered to stand in single file, the line reaching from the Bank's premises at 1708 Bubbling Well Road, well beyond Hart Road.
Bank officials questioned yesterday afternoon said that they were converting North-China bank notes at par, the maximum amount for each person being $10 and throngs continued to form a long queue in front of the bank until the closing hour in the afternoon. The Bubbling Well branch of the Bank of Communications was the only one of the Bank's four local offices to convert North China notes.
"Consolidated Bonds" Down Great excitement reigned in the Shanghai unofficial Chinese Government bond market yesterday when the reported moratorium on the main bond, the "Consolidated Bond" caused the prices of all the five issues of the bond to drop violently by 82 and $4.50 as compared with the previous day's figures. The drop is unprecedented since the outbreak of hostilities.
Text read from the printed page and cleaned; old type leaves the occasional error.