Reserves rise again

Press, Volume CXII, Issue 33037, 3 October 1972, Page 3

Reserves rise again

(N.Z. Press Association)

WELLINGTON, Oct. 2.

New Zealand’s overseas reserves rose slBm in August.

Figures issued by the Reserve Bank show that in August the current account continued the strong upward trend which has been evident since the beginning of the year, to move from a surplus of $137.2m for the year ended July to one of $155.4m for the year ended August. The reason for the present strength in the current account is a healthy rise in export receipts, which is offsetting by a wide margin a modest growth in both import payments and the “invisible” deficit.

The higher export receipts in August (compared with the same month a year earlier) resulted from increases for most exports. Items with

the largest increases were dairy products, wool and meat. The growth in receipts from dairy products is, however, slowing because price rises are not affecting annual figures to the extent that they did in earlier months. Also, there have been price reductions recently. Import payments in August were $6.2m, or 7.1 per cent, above those for the same month a year earlier, Statistics for the last three months indicate a moderate rise in import payments which is in contrast to the previous three months, when there was virtually no growth compared with the corresponding period in 1971. In the last 12 months total irnport payments rose by 4.8 per cent, while for the year ended August, 1971, there was an increase of 10.4 per cent.

The deficit on "invisible” transactions, $186.3m was little different from that for

1970-71, because the rise in receipts was almost the same as that for payments. For several months until recently this deficit was falling because invisible receipts were rising at a faster rate than payments.

During the year ended August there was a large surplus on capital account because of both a net private capital inflow of $91.5m and net official borrowing of $20.7m. There has been no new official borrowing for some time, but repayments of official overseas debt have, recently, been relatively heavy. The surpluses in both the current and capital accounts combined with the third allocation of Special Drawing Rights from the International Monetary Fund to give an increase in reserves of $284.8m. Official overseas reserves at the end of August were a record $787.3m.