CANBERRA, 19 September 1949, 11 a.m.
UNCLASSIFIED The following is the text of an announcement made by the Prime Minister this morning.
‘The United Kingdom Government has announced that the exchange rate between the United States dollar and the pound sterling will be two dollars eighty (2.80) to pound (S1).
The Australian Government has carefully considered the implications for Australia of the movement in the sterling-dollar rate. [2]
The Government has decided that the rate of 125 Australian to 100 Sterling shall remain unchanged.
Accordingly, the Australian pound will be devalued as against the United States dollar in the same proportion as sterling. The new par rate is two dollars twenty-four cents (2.24) to the pound Australian. This will operate as from the commencement of business today.
The International Monetary Fund has been consulted and has agreed.
The Governor of the Commonwealth Bank (Dr. Coombs) will make a statement over the air immediately for the guidance of the banks and the public generally. Banks will be open for business as usual today.’
_
1 Although the cited copy is addressed to the Australian Mission, Tokyo, inspection of the register of outward cablegrams shows that the message was sent to all posts.
2 In cablegram 532, dispatched 17 September 1949, Chifley told McFarlane that the basis of the decision was that ‘it would be economically unwise in the light of current and prospective conditions for Australia to appreciate against sterling’.
_
[AA: A1838, 708/12/1A]