MONEY MARKET.

Auckland Star, Volume LXVIII, Issue 113, 14 May 1937, Page 4

MONEY MARKET.

RESERVE BANK RETURN.

ALL DEPOSITS HIGHER

PRODUCE ADVANCES LOWER

(By Telegraph.—Press Association.)

WELLINGTON, Thursday

The Reserve Bank return for the week ended Monday, May 10, was gazetted to-night. The statement is balanced at i^32.301,796, or £242,413 more than at the end of the previous week.

The note issue was £56,994 lower than a week previously. Government deposits increased by £ 119,700, while those of the trading banks were £122.619 higher. Other demand liabilities increased by £5.5.600 to the unusually high level of £1,009.831. The sterling exchange reserve recovered from the fall of £171.000 registered the week before, being £495,075 higher in the present return. Advances to the Dairy Industry Account arc £246.38.) lower. Other changes in the assets are nominal. The statement, with variations compared with the week before, is as follows: LIABILITIES. Variation. £ .£ 1. General reserve . 1,500,000 Same -'. T.auk notrs 1:>,86::..-;61 — ,j0.,004 •i. I>euianrl liabilities — (HI State h<852.878 +ll!t,7<lO (In Hanks !i,!(40.O!i!l -j-l'J'J.iU'.l (ci Other J.iK«),s::i 4-55,000 6. Other liabilities . 120,027 4-1.48S Total f;:-j,:;oi,796 +1:42,41:; ASSETS. 7. Reserve—• £ £ la) Colli 2,8<>1.7!H Same d>l Sterling , ex. ... 20.<!. , !2.!Vr5 +4:t.'>.lU."> 8. Subsiiliar.v coin .. J44.J00 +li;il 10. Advances— 1. I'airy Indnstrj" Account 5,506,130 —246,385 -. For other purjio.ses li<H>.(KH» Same 11. Investment 2,;t*>H. t.To Same Otlior assets 7'.>,5.!l —(j.-l(M; Total £:>iv;i>i.7!m; +j4-j,4k; Proportion of reserve to notes and other demand liabilities, 76.396 per cent (75.374 last week;. Three Years Compared. The following table shows the position of the baijk's funds at this date for the past three years (in thousand of pounds): LIABILITIES. I!>.'is. 10.'J6. 19." , .". £ £ £ Capital ,-n>f> — — tieuernl n-serve .. l<ooo 1 ,r>oO l<soo Bank notes 0,:«0 10,120 12,86 a Demand liabilities— State 12,S<.>J 8,027 «.S.">:; liank o, !1.">2 8,084 !i,r)4!» «Hlicr 12 24<> 1,010 Other liiibillties . SO So l-'(> Total £27,802 £28,05S £32,302 ASSETS. Reserve— (iold 2,802 2.802 2.802 Sterling 22,710 23.540 20,«:!:i Sulisidiary coin . Kso 200 144 Ailvaiues to State or * State undertakings— ll) Uairy industry — — 5,5'>6 (2.1 otHiT purposes — — 200 (••!) other — — — Investment* 2,<>!H 1.R02 2,!« Mi Other asset-S '•'<■'> 222 S<) Total £27,502 £28,0JS £32,302 Proportion reserve to notes and other demand liabilities U>.e.) . 97.31 97.313 <«j..KH> The discount rate is 2 per cent, but the rate is purely nominal, ae the bank has not so far engaged in the business of discounting bills. Capital was added to general reserve under provisions of the Reserve Bank of New Zealand Amendment Act, 1936. The bank started business on August 1, 1934 Tlie item "advances to "State or State undertakings," eubdivided into two claeees, firet appeared on August 17 lafet: 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. The balance of thie loan item designated ae "for all other purposes" was stationary at £700,000 until November 30, after which it was increased, first to £800,000, and later to £1,800,000. The higher level was not maintained long, £1,000.000 being paid off. On May 3 it was reduced from £900.0(10 to £200,000. A third item under tbifi general heading "Advances to State" appeared in the return for March 15. Tt was designated as "other," and opened with a debit of £1(H(.(I(M). The next week it was reduced to .€75.000, and has pincfi disappeared. The holding of sterling exchange at £20.W2..)73 is £:V2'>7.ODo less than at this time last year, but a compensating item is ''advance** to the dairy industry,"' £. 1,536.000, which in the ordinary conrsp will become an addition to the exchange funds. This :s also a factor in tlio apparent decrease in the proportion of reserves to liabilities. BANK OF ENGLAND RETURNS. (Received 11 n.m.) LONDON, May 13. The Bank of England returns for the week ended May 12, compared with those of last week and a year ago, ave ae follows: — iSSt-'E DEPARTMENT. Tear May 11. May 4. ago. Notos issued— Tn circulation 470.0 47."..2 424.ft In banking elept. . . 3S.S :{S.r> .".n..". Other Gnvr. securities 184.2 154.1 247.S Other securities 4.S 4.1) .:-. Silver coin — — .0 Gold coin and bullion 318.7 313.7 204.3 BANKING DEPARTMENT. Rest 3.2 3.2 3.2 Deposits— I'nblic 32.5 1(1.4 13.4 Bankers 57.7 07.2 53.2 Otlior accounts .... 37.2 37.7 37.0 Government securities 108.M IOH.I 89.fl Discounts, advances . . ."i.'.l 5.5 S.S Other securities 21.3 21.0 12.3 Notes and coin 3!).1i 3!».4 40.3 Proportion 25.17 20.08 30.1S SHORT LOANS AND BILLS. LONDON. May 13. Discount and short loan rates on the London market are the same as those for last week, as follows: — May 6. May 13. p.c. p.c. Da.v-todny loans 1 ?. Fine trade bills (3 mos.) 2to 2?, 12 u> 2?, Rank hills (3 months) ... 9-10 you Hank bills (li months) ... £ 5 Treasury bills (2 months). i J Treasury bills (3 «:nonths) . 9-llj 0-16 j New York call money rates are steady at j 1 per cent.