MONEY MARKET.

Auckland Star, Volume LXVIII, Issue 269, 12 November 1937, Page 4

MONEY MARKET.

RESERVE BANK RETURN. EXCHANGE LEVEL LOWER. ALSO TRADING BANK DEPOSITS. (By Telegraph.—Press Association.) AN ELLINGTON, Thursday. The Reserve Bank return for the week ended Monday, November 8. was gazetted £26.112.2.15, or £ 1.156.374 less than at £26,712.235. or £1.156.374 les sthan at the close of the previous week. The principal movement in liabilities is a decrease of £1.190.066 in the level of trading bank deposits. Government deposits are £15.616 higher. There has been a fall of £36.732 in the value of the note issue, while other demand liabilities have increased by £55.383. The sterling exchange reserve is £939,037 lower in value than it was the week before. Advances to the Dairy Industry Account have decreased by £202,574. Other assets are £14.106 less. The statement, with variation compared with the week before, is aa follows:— LIABILITIES. Variation. £ £ 1. General reserve. 1..100,000 Same 2. Bank notes .... 13,2-_>6,001 —36 732 3. Ttemnnd liabilities— (a l State 4.646.7R5 4-1fi,616 (b) Banks .... 6,731.891 —1. (r> Other ...... 460.747 4-.V5.383 6. other liabilities' 14.*.911 575 Total 26,712,235 —1,156,374 •ASBETS. £ £ 7. Reserve— (a I Gold 2.801.791 Same (h) Sterling ex. 16,209.931 —5(39 037 8. Subsidiary coin . 85,397 —657 10. Advances— (1) Dairy Industry Account 4,198,129 —202,574 (2) For other purposes . . 700.000 Same 11. Investment .... 2,H^5,32.">. Same 13. other assets .. 58Jift3 —14,106 Total 26,712,235—1,156.374 Proportion of reserve to notes and other demand liabilities, 75.845 per cent <76.083 last week). Three Years Compared. The following table shows the position of the bank's funds at this date for the past three years (in thousands of pound*) : — LIABILITIES. 19.V). 1936. 1937. £ £ £ < apllnl 500 — — General reserve .. 1,000 1.50n 1..-.00 Bank notes 9,102 11,«it»5 13,227 Demand liability — (a I state r.7l:| 3.503 4.r,4ti (hi Hunk 4.20K 8.554 ti.732 (11 other 707 322 4fio Other liabilities . . 97 I«{* 14«j Total 21,527 25,953 2«,712 ASSETS. £ £ £ Reserve— (U) Gold 2.802 2.81)2 2,802 (bi Sterling ... 18.04S 16,3«1 1«,210 (c) Subsi diary '•"in 211 146 85 Advances 10 State— Dairy industry . — 3.592 4.19R Other purposes . — Too 700 Investments 1,538 2,287 2,608 Other assets 2*. 65- 58 Total 21,527 25,533, 26,712 Proportion reserve to notes and other demand liabilities ip.c.i 1*0.09 78.71 75.845 The discount rate is 2 per cent, but the rate is purely nominal, as 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. The item "Advances to State or State j undertakings/' subdivided into three : classes, first appeared on August 17, 1930. I The first covers the dairy industry. I In bis report to Parliament on September 28 the governor of the bank; Mr. L. Lefeaux, referring to other advances under this heading stated: It has been decided to include under the heading of discounts only such bills as are discounted for third parties, and to show as "Advances to the State - ' any temporary accommodation granted to the Treasury whether against Treasury bills or otherwise. This procedure will reveal at any time the extent to which the power to grant accommodation to the Treasury under section 15 of the Reserve Bank of New Zealand Amendment Act, 1936, has been exercised. Long-dated Government securities, which can now be held by the bank without. limit as to amount, are included under the heading "Investments." The holding of sterling exchange at £16.200.931 is over £151.000 less than at this time Inst lear. However, the item "Advances to the dairy industry." £4.108.129. in the ordinary' course will heroine an addition to the exchange funds. This is one of several factors in the apparent decrease in the proportion of reserve to liabilities.

BANK OF ENGLAND RETURNS.

CIRCULATION SLIGHTLY LESS. LONDON, November 11. The Bank of England rettwns for the week ended November 10. compared with those of last week and a year ago, are as follows, in million pounds:— ISSUE DEPARTMENT. Nov. Oct. Year 10. 3. ago. £ £ £ Notes Issued — In circulation .... 485.6 485.0 446.6 In hanking dept. . 40.S 40.5 62.0 Other Govt, securities ISS.I 188.1 247.1 Other securities .... 0.9 0.9 1.8 Silver coin — — 0.1 Gold coin and bullion 326.4 326.4 245.6 BANKING DEPARTMENT. Rest 3.2 3.2 3.2 Deposits—Public 30.7 30.3 14.9' Bankers 510.9 80.5 OS.O Other accounts ... 3<1.1 36.6 41.6 Govt, securities .... 103.9 103.4 80.4 Discounts, advances . 8.4 7.8 8.6 Notes and coin 20.8 20.8 62.9 Other securities .... 42.3 42.1 20.3 "Proportion" 26.86 26.91 40.73 Rate of Discount. The Bank of England rate of discount is 2 per cent, to which it was reduced on June 30, 1932, from per cent.