Another decline in the value of the Chinese dollar occurred yesterday when the Hongkong and Shanghai Banking Corporation and the Chartered Bank of India, Australia and China withdrew their support. The local exchange market opened with a nominal selling rate of 3%d, for sterling and 43% for U.S. dollars, as compared to yesterday's rates of 4h.' and 5jj, respectively. In the afternoon quotations continued to fluctuate, the inter-bank closing rate being 3%d. and 4$ respectively. Yesterday's rates were 4%d. and 8H. Throughout the day there was no market for June delivery.
There were only buyers early during yesterday's session but at about noon some sellers ventured into the open, although it could not be learned whether any selling on behalf of the Exchange Equalization Fund had been resumed. The yen followed the trend of the Chinese currency on the unofficial market, while gold bars soared to the unprecedented high of $6,700.
On the stock exchange prices went up immediately after the opening, only to decline again later in the day with values closing at various levels although generally somewhat above the opening rates, Brokers were said to have been surprised at the fact that no bigger increase became apparent to make good for the depreciation in the value of Chinese currency.
But other repercussions were to be noted early in the day, when grocers, compradores and even department stores declined for a time to sell imported goods, in particular tin foods and spirits, until they had received some indication of the state of the market, Meanwhile, rice and flour prices also soared on the whole-sale market although these increases did not make themselves felt on the retail market.
Reasons for the sudden decline in the value of the Chinese currency were not known yesterday, although some circles believed that recent heavy imports had induced the Exchange Equalization Fund to withdráw its support, at least temporarily, until a more natural level corresponding to the value of the currency, is Some quarters ventured to suggest that the policy of the new Nanking Government may have something to do with the collapse of the Chinese dollar inasmuch as that the new Central Bank being established by the Wang Ching-wei regime was believed to be planning an absorption Chinese national bank notes through another new note issue, so as to be able to obtain foreign exchange, As soon as news of the crash was circulated, exchange shops along Szechuen and Nanking Roads were rushed by the public which was eager to purchase U.S. dollars and Sterling. Rates quoted on the unofficial market. were so erratic, however, that it was quite impossible to ascertain even approximate rates.
The planes, flying the Alexandria-London route, will make their overnight stop hereafter at Athens or Marseilles, it was understood,
Text read from the printed page and cleaned; old type leaves the occasional error.