London, Jan. 8, Following Friday's momentous deci sion to re-transfer_from the Issue Department of the Bank of England. +£200,000,000 in gold at the old parity rate, or roughly £350,000,000 at the present market rate, to the Exchange Equilization Account, operators in the [London Foreign Exchange and Bullion markets spent an exciting time yex~ terday moring.
Sterling, in moderate dealings, appreciated in terms of dollars as bears. Tushed to cover. Subsequently, the tendency showed signs of a reversal, but the Exchange Equalization Fund [promptly stepped in by selling dollars, which Kept the rate on an even keel.
'Some surprise was expressed at the faction of the authorities who, at the 'Axing, bid up the gold price' to 2d. lover parity, absorbing roughly two-thirds' of the offerings, Meets Favourable Reception The decision of the Treasury to strengthen the defensive powers of the British Equalization Account met with a generally favourable reception here was pointed out by authoritative City elreles that the "Fund may the gigantic amount of +£450,000,000 sterling, which 1s considered ample to meet any possible It is hoped that foreign speculators will realize that the new measure is in no way inflationary, as it does not fect the increase in note elreutation, Moreover {t's pointed out, the Bank td. reserve at the: present market exchange Stil stands at £230,000/000 sterling.
Athough it is impossible to estimate Jaccurately the amount of foreign exchange Balances still maintained. in. London, there is no doubt that even the unlikely event of withdrawals of foreign funds continuing at their recent heavy rate, the "authorities would be equipped' to check the adverse effects of such movements for about two years, Moreover, it is stated, a considerable portion of foreign balance represents
fend their transfer should not affect actual gold held here in sate custody, the foreign exchange position. It is emphasized that the measure of defence for sterling in no way constitutes the Imposition of exchange jcontrol.—Reuter.
Netherlands Believed Ca-operating Amsterdam, Jan. 8, Although nothing has yet been decided with regard to the Netherlands Atlitude towards the British currency defence move, It is considered certain that "Holland will no refuse 10. ¢o-operate to check a speculation against sterling. ests Newspapers point out that Britain's intention to defend sterling is "of the greatest significance to Holland." The sterling level, it is stated, Is a very Important factor to Nathertands, shipping companies operating to, plantations in the Netherlands. East Indies, who calculate their prices in British currency.
The Fecent weakness, financial cir cles here stress, has already unfavourably affected Nertherlands business Reuter,
Text read from the printed page and cleaned; old type leaves the occasional error.