MONEY MARKET.

Auckland Star, Volume LXIX, Issue 141, 17 June 1938, Page 4

MONEY MARKET.

RESERVE BANK RETURN. FALL IN EXCHANGE. PRODUCE ADVANCES HIGHER. (By Telegraph.—rress Association.) WELLINGTON*, Thursday. The Reserve Bank return for the week j ended Monday, June 13, was gazetted to ; j Slight. The statement its balanced at 1 £27,345.1H!, or £695,839 Kss than at the i-li'se of the previous week. ' I J here iuir» been considerable inoveiueut ' ! in the deposits wince the previous return. J I The holdings of the trading banks arc I tS."!!.7().") lower, while those of tlie tinv- " J eminent have increased by t'JOT. '.)',\\. 'J'he 1 I value of the note iseuo has fallen by ■"'j ; t'127,961 in the week, and other drinand :• j liabilities have increased by £82,402. • j The most marked change in the anset*i 1 , is a decrease of £8.">8,12l in the value of J the sterling exchange rrsorv,'. Advances ! to thp Primary Produce M.ukotinc: Dejiai't--1 nient are £.306.706 higlier. while other " I assets have decreased by £142."5. The statement with variations com- ! 1 pared with the week before is as I follows: — II LIABILITIES. Variation. v £ £ c 1. General reserve 1,500,000 Same „ 2. Bank notes .... 13,704,322 —127,;K>1 t ■ 3. Demand liabilities— (a) State 4.905. ,"1!) -i-207.!»T>. - S (b) Banks .... (>,(;.">".7K1 5.V.1.7<;."> (0) Other -)-52,1i)2 6. Other liabilities !>!>.lSl> +1.421 Total 27,348,119 —U'.d.SSU ASSETS. •£ £ 7. Reserve— (a) Gold 2.801,791 Same I" (b) Storling p.\. 10,!»43.4ii.-| — 57,5.121 1 I S. SuhsUliary coin 228,fi()1l +1,013 s - 10. Advances— 1 1. Marketing Department .. 4,209.943 +306,700 n 2. For o t ii e r 1- purposPS . . 300.000 Same 11. Investments .... 2,7J12.(>•>."> —3.."00 13. Other assets .. 72.2.">.j —142.,"<7S Total 27,348.119 —OOj.SSO , Proportion of reserve to notes and I, other demand liabilities, 76.C53 per cent ; (77.906 last week). '{ Three Years Compared. ; The following table 6hows the position it of the bank's funde at this date for the past three years (in thousands of r ; pounds):— ;i LIABILITIES. * 1930. 1937. 1938. 't £ tc i; : General reserve .. 1,500 1,500 1 ,"iOO : Hank notes 10,049 12.543 13.704 2 Demand liabilities— (nl State. 9,70S S.KP7 4.! 1:1 s (hi I'miik 7."'. i."i j> i'i'.i:: (1 Yi.-(S (e) Other 147 88 1 '3SS 2 I.ialiilities in currencies o th e r / Hum N.Z l<l ; Other liabilities . . 8!J 127 9'.l Total 28,»>i>7 32,154 27.31S ASSETS. £ £ £ Reserve—(a) Gold 2.502 2.802 2,802 (In Sterling ... 23,35* 21.124 ltj.'UH Subsidiary coin .. 198 112 228 Advances to stateDairy iniliistry . — 4,932 4,27(1 Oilier purposes . — 2tm isun Investments 2.i>15 2,! Mm; 2,7.!2 Other assets 2U4 77 72 Total 28,007 32,154 27.34s Proportion reserve to notes and otner demand liabilities (p. C.J 00.72 75.3S 70.053 The discount rate is 2 per cent, but the rate is purely nominal, as the bank has not so far in the business of diecounting bills. Capital was added to general reserve under provisions of the Reserve Hank of Xew Zealand Amendment Act, 1936. The bank started business on August 1, 1934. The item "Advance* to State or State undertakings." subdivided into thret claetee, tiret appeared on August 17, 193u. The tiiwt covers tile dairy industry. In his report to Parliament, on Sepn tember 28 the governor of the bunk, Mr. e ' i L. Lefeaux, referring to other advances ''■ i under this heading stited: ll hae been decided to include under the heading oi discounts only such bills rk are discounted for third parties, and to ebon as "Advance* to the State" any temporarj accommodation granted to the Treaeurj whether against Treasury bills or other wise. This procedure will reveal at anj 1 time the extent to which the power to grant accommodation to the Treasurj under section 15 of the Reserve Bauk oi Xew Zealand Amendment Act, 1936, hai been exercised. Long-dated Government securities which can now be .held by the bank with 5 e ! out limir ae to amount, are include , I under the heading "Investments." Principal Changes. Compared with a year nan note lssm i.s !_'Hiili.iMM> higher, while State and b.inl-ue]>o-its coMiUined Hit' over LTi.IMKI.IHH lower. On the assets side the thiol' move melit is in sterlinjl, which is lower by nvei £ t.oou.fmo. Compared with two ye.m ;i;ri> sterling funds have decreased l>y ovei fli.41X1.(100, but as a partial set <>if is tin item ■"Advances to the dairy industry,' which is over £4.000.000. Tins proportion of reserves to note am nth"r demand liabilities in over 'JO pel cent less tlu>n it was two years ago.