MONEY MARKET.

Auckland Star, Volume LXVIII, Issue 1, 2 January 1937, Page 4

MONEY MARKET.

RESERVE BANK RETURN. BIG ADVANCE TO STATE. INCREASED NOTE ISSUE. Another big increase in advances to Statie undertakings appears in the Reserve Bank return for the week ended Monday, December 8, which was issued last night in Wellington. The statement is balanced at £30,107,781, which is £408.579 more than the previous week. Advances to the Government against the dairy industry account are increased £60,818, a small matter compared with the rise of £500,000 in advances for other purposes. Note issue shows a further rise, though nothing like that recorded in Christmas week. Reserves are further reduced, holdings in sterling exchange being £151,504 lower. The statement with variations compared with the week before is as follows: — LIABILITIES. Variation. £ £ 1. Gen. Teserve ... 1,|W0,000 Same 2. Bank notes 13,641,451 +145,929 8. Demand liabilities— (a) State 3,530.007 +44,934 (b) Banks 11,056.206 +154,344 (c) Other 236,397 +56,002 6. Other liabilities. 134,058 +0,708 Total 30,107,781 +408,579 ASSETS. £ £ 7. Reservefa) Gold 2,801,790 Same (b) Sterling ex. 10,534,424 —151,504 8. Subsidiary coin. 110,902 —1,985 10. Advances—■ (a) To State or State undertakings: (1) Dairy industry account 6,059,572 +60,818 (2) For other purposes . . 1,800,000 +500,000 11. Investment 2,700,315 —283 13. Other assets ... 100,770 +1,535 Total 30,107,781 +408,579 Proportion of reserve to notes and other demand liabilities, 67.008 per cent, compared with 69.42 last week. Three Years Compared. The following table shows the position of the bank's funds at this date in the past three years. In the figures quoted, the final three noughts are omitted:— LIABILITIES. 1034. 1035. 1936. £ £ £ Capital 500 500 — General reserve .... 1,000 1,000 1,500 Bank notes 0,772 10,721 13,641 Demand liabilities— State 6,693 3,696 . 3,540 Banks 9,072 9,679 11,056 Other 6 362 236 Other liabilities 40 114 134 Total 27,083 26,072 30,108 ASSETS. £ £ £ Gold 3.002 2,802 2,802 Sterling 22,092 21,309 16,534 Subsidiary coin .. 04 196 111 Advances to State or State undertakings— (1) Dairy Industry — — 6,060 (2) For other purposes — — 1.800 Investments 1,872 1,639 2,700 Other assets 23 SO 101 Total 27,083 26,072 30,103 Proportion of reserve to notes and other demand liabilities. 08.24 08.048 67.908 The discount rate is 2 per cent, but tbe rate is purely nominal, as the bank has not so far engaged in tbe business of discounting bills. Capital was added to general reserve under provisions of the Reserve Bank of New Zealand Amendment Act, 1988. The bank started business on August 1, 1934. The item "advances to State or State undertakings," subdivided into two classes, first appeared on August 17 last. The first, which covers the dairy industry, increased rapidly until the week ended November 9. when a slight fall was recorded. , Since then there have been weekly fluctuations, and the latest figure is the highest recorded. The balance of this loan item designated as "for all other purposes" was stationary at £700,000 until a few weeks ago, and since then- it has been increased rapidly by £1,100,000.