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Thursday, 24 August 1972
Page: 641

Mr GILES (ANGAS, SOUTH AUSTRALIA) - I address my question to the Treasurer. Are there any examples in the world scene of a currency crisis that has been affected by unwise remarks by political figures?

Mr SNEDDEN (BRUCE, VICTORIA) (Treasurer) - The facts are, of course, that many currency crises have been stimulated by unwise comments by political leaders. The most recent such comment was made by the shadow Chancellor of the Exchequer in Great Britain, Mr Healey, on 20th June this year. He said - I do not remember the exact words - that the pound sterling was over-valued. Within a very short period of time a great number of changes started to occur on the markets. The Chancellor of the Exchequer, Mr Barber, presented with this problem, argued that there was no need for the movements which were occurring. But those people who are in control of international currency, which has an immense capacity for movement from one country to another, were not affected by what the Chancellor said. Very real pressure was put upon the pound sterling. In due course the British Government found it necessary to float the pound sterling. The pound sterling is today still floating. The British economy has been subjected to very real difficulties as a result of the statement made by the shadow Chancellor of the Exchequer.

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