ADVANCES BY BANKS

Press, Volume CVI, Issue 31169, 20 September 1966, Page 20

ADVANCES BY BANKS

£5.5m Penal Borrowing Advances by trading banks during August kept strictly to the levels set by the Government, according to the New Zealand Bankers’ Association Research Directorate. Severe restraint on bank lending will remain until after the tax drain in March, the association’s research director, Mr R. O. Smillie, said.

Advances on August 31 the last Wednesday in the month—were £236.9m. against £239.6m. on July 27. Trading bank borrowing from the Reserve Bank at the 7 per cent penal rate was £5.5m. on August 31. Bank deposits at the end of August were £368.6m. compared with £367.5m at the end of August last year.

A £5.2m. increase in inter-est-bearing deposits caused the slight rise.

More attractive interest rates lifted interest-bearing deposits to £83.4m at the end of August from £78.2m a year earlier.

Liquid assets of the banking system at the end of August were £101.5m almost £2om down on the year before. This was caused by the balance of payments deficit and the Government running a surplus in its cash budget.

Good Gains By Pound

The pound hardened against most currencies last week, according to the latest telegraphic transfer rates from the Bank of New South Wales yesterday. The Swiss franc was steady, while the Danish crown was fractionally stronger.