THE MONEY MARKET.

Auckland Star, Volume LXVIII, Issue 155, 2 July 1937, Page 4

THE MONEY MARKET.

RESERVE BANK RETURN. BANKS' HOLDINGS HIGHER. FALL IX STATE DEPOSITS. ■ (By Telegraph—-Press Association.) WELLINGTON, Thursday. The Reserve Bank return for the week ended Monday, JuDa 28, was gazetted tonight. The statement is balanced at £32,399,06(5, or £203.018 more than at the close of tlie previous week. The fall in the level of the note issue continues, there being a difference of £128,236 from the total a week before. Government depo*it« are £281.060 lower, but those of the trading banks have increased br CZ12.022. The sterling exchange reserve lias increaijcil in value by £365,410, while advances to the Dairy Industry Account arc lower by £151.348. The .statement with variations compared with the week before is Uβ follows :--- LIABILITIES. Variation. 1. (ii'tiiTal reserve. 1,50(1,1100 Same -. Hank notrs ... 12,tlSo.S:»S —T'S ".Vi 3. Demand liabilities— (a) Slaif 7.3(11.047 — 2XI,W!U o>i Hanks '.i.P'ji.o'.io H-iirj.:>"-"J (c) Other H04.11N.~i +14.571 li. Other liabilities. iSiS.I Oli —t:t.U."ili Total f>2,SPO,O(}O -f--J(i:{.;)l!^ ASSETS. i: £ 7. K.servc— (a) Ciiild -'.SOl.Tftl Same (in stc>rliiifi t-\. 21.r>12.U37 +:!iir>.4l!i S. Subsidiary coin. 117.27;; +7,Sly 10. Advanci-s----1. Maily industry Account .... 1.751.!<!•:; — 1.*i1.34t> 2. I' , <» r ii Ih or . . . 211(1.1)00 Same 11. Investment .... J.'HHM.'iO S;iinr 10. Other assrts .. 7."i.!12J - 17.1171 l'rojiortiuu of leservr- t<. notes ami <«tln-i demand liabilities, 70.012 \<ev cent (78.137 last week).

Three Years Compared. The following tiibli! slkiws tin: positior hi' the bank's funds at this date fur tlw iiact three years iin thousands rf 1-ou.uls):-MARIMTIKX. 1935. 1930. Ui:i7 ! £ £ <U j Capital ,->«>o - -— I (ii'iti'ral rrsrrvr .... 1.00(1 1.5110 1.500 j !".:;iik iinti'n lun ii»,<ni r_',<i:n ii,n::.l!il liabilities — i;i i suite 13.28K s.s-in t.:;i;l lin H.uik 3,'Jl."i ll.fliiT '.i.si'l (f I lltlicr 23 'JTiS U!IS i Illicr li.-ibilitics .... ."it !><i SS Total 27,801 27,426 32. ;}'.)!> ASSETS. ~ * £ £ Keserve— Guld 2,802 2,Si>2 2.N02 sterling -.'j.si;; 22.122 21,54:: Subsidiary coin ... 14»> lyy 117' A (Ivan c-os to State— (II Hairy Industry — — 4,7."i."i 12 I Other imriios.s -jimi Investments 2,0!>4 2.u;>7 2,IMH> LMher assets 36 273 7<> 'Total 27,801 27,426 32,399 Proportion reserve to mill's anil other tlemaml liabilities 07.25 00.400 79.012 The discount rate is 2 per cent, but the rate k purely nominal, as thp bank has not so far engaged in the business of discounting bille. Capital was added to general reserve under provisions of the Reserve Bank of New Zealand Amendment Act, 1036. The bank started business on August 1, 1934. The item "advances to State or State undertakings," subdivided into three classes, firet appeared on August 17 last. The first covers the dairy industry. The balance of this 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 vras not maintained long, £1,000,000 being paid off. On May 3 it was reduced from £900,000 to £200,000. A third item under this general heading, "Advances to State." appeared in the return for March 15. It wae designated as "other." and opened with a debit of £100.000. The next week it was reduced to £75.000. and has eince disappeared. The holding of sterling exchange at £21,542,000 is £579,000 less than at this time last year, but a compensating item is "advances to the dairy industry," £4.755.000, which in the ordinary course will become an addition to the exchange funds. This is one of several factors in the apparent decrease in the proportion of reserves to liabilities.

BANK OF ENGLAND RETURNS. NOTE CIRCULATION HIGHER. LONDON, July 1. The Bank of England returns for the week ended June 30. compared with thoee of last week and a year ago. are as follows, in million pounds:— ISSUE DEPARTMENT. June June Year 30. 23. ago. £ £ £ Votes Issued— In cimilntion ... 48R.4 483.7 439.6 In banklnjr depr... 38.0 42.7 415 Other Govt. securities 184.1 184.T 245.1 Other securities .... 4.9 4.!) 0.1 Silver coin -— — 0.8 Gold coin an f j bullion 32G.4 326.4 221.1 BANKING DEPARTMENT. Rest 3.4 3.4 3.4 Deposi-ts—• Public 10.8 15.5 9.0 Bankers' 140..". 05.0 111.7 Other accounts . . 40.2 37.2 39.8 Government securities 140.l"> 9R.0 110.4 Discounts, advances . 6.3 3.8 10.6 Other securities .... 23.6 20.2 15.9 Notes and coin 38.9 43.0 42.3 "Proportion" 20.30 29.52 26.29