FURTHER RISE IN RESERVES

Press, Volume XCVIII, Issue 28938, 4 July 1959, Page 12

FURTHER RISE IN RESERVES

Assets Now More Than £loom

For the first time in nearly two years, New Zealand’s overseas reserves exceeded £lMm on June 24. At that date, „■ according io preliminary figures israed by the Reserve Bank to the New Zealand Press Association last .evening, the total was £ 190.7 m.

This figure, which represents overseas assets of the Reserve Bank and the trading banks, less overseas liability, is £3.Bm above the figure a week earlier. It compares with £ 52.9 m on June 25, 1958, and with £ 113.1 m on the last Wednesday in June, 1957.

The movement in overseas reserves in the first six months of this year has been steadily upward, with scarcely a check. This trend has been in marked contrast to last year, when, in spite of heavy overseas borrowing, the reserve rose and fell unevenly between £42m and £6lm (reached in December). 1957 Trend Paralleled

The steady rise this year—amounting to £ 45.6 m since the end of December—closely follows the 1957 trend. In that year the increase in the first six months was £ 36.6 m, to a seasonal peak of £ 113.2 m in the third week of June. After falling below £loom in August the reserves fell rapidly, under the double pressure of declining export prices and heavy imports, to £ 45.5 m by the end of December that year. The seasonal peak in overseas reserves is usually reachd late in June or early in July. The decline from the peak should be less abrupt this year than in 1957, because of import restrictions. The decline in the latter half of the year will consequently be considerably less than the £ 67.7 m in 1957, and may not exceed the £3om average of recent more normal years. Three Years Compared

Net overseas assets of the New Zealand banking system on the last Wednesday in the month for the first six months of the last three years are shown in the. following table:— •

1959. 1958. 1957. £m. £m. £m. Jan. 59.8 42.8 77.3 Feb. 69.3 47.1 84.7 March .. 74.9 49.8 89.4 April 85.2 48.7 100.3 May 93.0 51.6 109.9 June 100.7 52.9 113.1 Increase, Jan.-June 40.9 10.3 35.8