Effect Of Credit Curbs Queried

Press, Volume CVI, Issue 31279, 27 January 1967, Page 1

Effect Of Credit Curbs Queried

(New Zealand Press Association)

WELLINGTON, January 26.

Trading bank advances continue close to targets set by the Government. On December 29 they were £2272 million, more than £5 million lower than a month before, according to the Bankers’ Association.

Total credit limits at the end of December also showed a fall on the previous month and at £408.8 million were £2.1 million lower.

The comparatively high level of private spending, in spite of strict control on bank lending, suggests that a major review of the effectiveness of monetary policy is necessary. Certain seasonal influences showed up in the December bank figures. Non-interest bearing deposits rose £16.5 million in the month to £296.9 million, and were £4.6 million higher than a year before, and till money to service the Christmas spending was £3

million higher in December.

Other changes represented a continuation of recent trends in bank development Inter-est-bearing deposits rose £4.2 million in the month and were almost £lO million higher than a year before at £93.9 million.

Security holdings by the banks rose £2.5 million to £36.2 million, which was £5.3 million higher than a year before and a reflection of the authorities’ decision last year to enable banks to make increased investments in Government stock.

Deposits in trading bank savings banks, which first opened for business in nonrestricted areas in October, 1964, now amount to more than £9O million after a rise of £3 million in December.