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Tuesday, 11 September 1973
Page: 737


Mr SNEDDEN - My question is addressed to the Treasurer. Yesterday he said that the Reserve Bank would intervene in the next few days to help the market establish a new interest rate for Commonwealth bonds. He also said that the Reserve Bank had a figure in its mind, whatever that means. That was the way that he put it. I now ask the honourable gentleman whether he will say what figure the Reserve Bank has in mind. Does he accept that the success of the July loan, when I think $239m was subscribed, depended upon the confidence of the subscribers that the interest rate would remain at 7 per cent? Does he accept that no Commonwealth borrowing can succeed until there is certainty in the minds of investors about the long term bond rate? Does he accept that until there is certainty, the proposal of the Prime Minister that they would soak up excess liquidity cannot be achieved?


Mr CREAN - I am surprised that a former Treasurer should know so little about open market operations. I will not indicate the level.







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