Employees at German stock exchanges had a busy day today (29 June) following the West German government's decision to revalue the Deutschmark by five-and-a-half per cent.
GV EXT. FRANKFURT STOCK EXCHANGE
GV Brokers at work PAN TO stock chart.
SV Broker on 'phone
SV Brokers in side office.
SV Jobbers on telephone
SV Women mark dollars against Marks on board.
SV Jobbers answer telephones (3 shots)
GV Jobbers at telephones.
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Background: Employees at German stock exchanges had a busy day today (29 June) following the West German government's decision to revalue the Deutschmark by five-and-a-half per cent.
The decision, denied categorically by Finance Minister Helmut Schmidt less than twenty-four hours earlier, followed a big inflow of European currencies and a steep decline in the Mark value of the United States dollar.
It was the second revaluation of the Mark this year -- the first was in March when the value of the Mark was increased by three per cent.
European Economic Community officials said the revaluation showed how vulnerable the Community's system of narrow margins between its currencies was to internal speculation; the joint float by the six countries concerned shields them from speculation outside the community.
But because of internal speculation, the Mark came under heavy pressure and the West German Control Bank in Frankfurt had to buy European currencies worth ever four thousand million Marks during the past twelve days.
Britain, Ireland and Denmark, although members of the EEC, have so far stayed outside the joint float system which says that members must keep their currencies within a limit of 2.25 per cent of each other.
The flow of money into marks meant that banks in France, Belgium and Holland had to support their currencies to keep them inside these limits.
Last night, because of the pressures, a special cabinet meeting was called by Herr Willy Brandt, the West German Chancellor, and the revaluation was decided upon. Following it, the U.S. dollar, already at a record low against the Mark, fell further to between 2.4150 and 2.4300 -- a loss of value against the Mark of nearly 14 per cent since last month.