MONEY MARKET.

Auckland Star, Volume LXIX, Issue 77, 1 April 1938, Page 4

MONEY MARKET.

RESERVE SANK RETURN. # " RISE IN NOTE ISSUE. EXCHANGE TOTAL FALLS. (By Telegraph.—Press Association.) W ELLINGTON, Thursday. The Reserve Bank return for the week ended Monday, March 28, was gazetted to-night. The statement is balanced at £28,31(5..">75, or £0(>9,640 less than at the close of the previous week. Government deposits are lower by £783.130 than in the previous week's return, while those of the trading banks are £9811 higher. The note issue, after ,i steady tall lasting over many weeks, had increased by £24.227. Other demand liabilities are £48,318 higher. The sterling exchange reserve, which had shown several successive increases, has now fallen by £245.910. Advances to the Primary Produce Marketing Department are £278.467 lower. The statement, with variations compared with the week before, is as follows: — LIABILITIES. Varia t lon. £ £ 1. General reserve 1,500,000 Same 2. Hank ii"to s .... 1:;,551,108 -121,277 3. Jteinand liahililies - lai Stale ..... 7.1 1.-..201 —-783.130 (In Banks .".."iss.imr, -• it.si | (e) other 3M.n9t -f'l*.3ls 0. Oilier liahililies. 204.090 -|-1,131 Total 28.310,575 —699,t'.40 ASSETS. £ £ 7. Reserve— (a) (odd 2,801,701 Same (hi Slotting ex. 1ti.929.1i0 1 —245.9 10 8. Subsidiary coin. 228,230 —789 10. Advances — ( 1 ) Primary produce niarketiiiL.- 5,109.127 —278,107 (3| <>lii or .... 200.000 _ ..-,11.0011 11. Investment .... 2,971.985 Same 13. oilier assets ... 75,791 —121,11 1 Total 28.310,575 —099,040 Proportion of reserve to notes and other demaml liabilities, 71.14.) per cent (73.113 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 I pounds): —

LIABILITIES. 103 G. 10P.7. ions. £ i: & Capital 1,000 — — fcteu.-ral reserve .. 500 1.500 1.500 Hank notes in.tr>:; 1 3.1 70 1 I Demand liabilities— (a) state S.7SO 7.SSS 7.115 (in Hank S.'.iOJ Jvsso 5.55K (ci other rj_' 15:: :;51 Other liabilities .. 145 15<i 'Jo 1 Total 2».7"l 31,750 L'S,:: 17 ASSETS. £ £ £ Reserve—(a) Gold 2.sn-j 2.502 2.R02 (111 Sterling ... 21, s 3" 10,o!io Id.p.'lo Suhsidia ry coin .. Jo J 15 o J J.s Advances to state — Dairy industry . — 0i o 5,1'>0 Other purposes . — soil •Jim Investments 1.R20 2.4 53 2.07J Other assets 3S IJU 70 Total 29,701 31,750 25.317 Proportion reserve to notes atul other demand liabilities (p.c.j 95.49 72.70 71.1 15 Tile 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, 1034. The item "Advances to State or State undertakings," subdivided into Since classes, first appeared on August 17, 1930. The rii'st covers the dairy industry, j In his report to Parliament 011 Sepj tember 28 the governor of the bank, Mr. L. Lefeaux, referring to other advances under this heading stated: It lias 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 ieve.il at any I time the extent to which the power to | grant accommodation to the Treasury 1 under section 15 of the Keserve I? i»k of Xcw /•.caland Amendment Act, 1931', 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." Compared with a vcar ago. note issue is higher liv 'J ::75.1H"1. Stale .and bank deposits combined are c 1.1100.0011 lower. 011 the assels side tile chief nievcnieiu is in tin- holding of sterling. which is C2.Hio.oi>i> lower. Compared witli the position two years aire sterling funds have decreased by nearly c s.non.niio. hut as a partial set-off is the item "advances to the dairy industry," which exceeds £ 0.000.00u.