Tokyo, Nov. 13.
A new temporary agreement for the determination of yen-sterling rates has been adopted by Japanese riks dealing in foreign exchange.
The main points of the agreement, which came into effect yesterday, are as follow:
1, Telegraphic transfer of the buying rate on London will hereafter be pence higher than the prevailing rate, 2. Forward selling rates will be fixed on the basis of the previous day's closing quotations on New York on the three-month forward position, with specified variations from the spot rate. In this case, fractions of less than.3 shall be disregarded. The closing dollar-sterling rate in New York on the three-month forward position will be determined according to daily cable reports to the Yokohama Specie Bank from its New York correspondent. In the event of a holiday in New York closing the market, or disturbances to wireless facilities making it impossible to receive the report, the rate will be determined on the basis of the latest cable.
3. Forward buying rates will be determined on the basis of the telegraphic transfer of the selling rate of the day of their respective deli ivories, with the same rate of variation as from the spot rate, 4. When forward rates are not quoted in New York, or in case it is deemed inappropriate to fix rates on the basis of the aforementioned methods, they will be determined otherwise with the approval of the Finance Ministry, 5. In case of foreign exchange contracts whose positions are not clarified, the foregoing provisions will be applied: in the case of selling rates, the first day of the provisionally contracted month of delivery will "be recognized as the delivery day; and, in the case of buying rates, the last day of the provisionally con. tracted month will be recognized a: the settlement day.
Since an essential feature of the new agreement is the difference between the telegraphic transfer of selling and buying, the rates will be broadened in order to minimize the difüculty now being experienced by the banks in covering, owing to the recent wide fluctuations of the New York/London cross rate.
It is expected that the new arrangement will be somewhat disadvantageous to exporters, but bankers point out that the agreement is not permanent and will be suspended as soon as the dollar/sterling rate in New York settles down to normal.—Reuter.
Text read from the printed page and cleaned; old type leaves the occasional error.