Bank liquidity improved
Some recovery from the tax-drain is visible in banking statistics for April. ! Liquid assets moved up, ibut the recovery was not [quite as strong as last year, land remained below 1976 'figures, the New Zealand Bankers Association reports. I Trading bank liquid assets rose S7IM to $627M in April, compared with a rise lof S77M to $666M in April [last year. . In April, pressure from iborrowers was strong. Although credit limits were reduced S3OM. actual lending increased, and unexercised authorities shrank. Last year, lending was reduced. Further strong competition 'for funds, and efforts to (keep the growth of lending in check are indicated for May. The first sign of reduced levels of actual lending was visible in the second week of May. The reserve asset ratios have been set by the Reserve Bank at 19 per cent Tor demand deposits, and 15 per cent of time deposits. I The corresponding ratios in I March were 13 per cent and 110 per pent. I Deposits increased almost SISOM. compared with a net
decrease of SIOM in April; last year. 5 Nearly all of this year’s! growth has been in interest-] bearing deposits, illustrating! the strength and; effectiveness of the banks’, efforts to attract funds. Interest-bearing deposits j. increased at almost treble 5 I the rate achieved last year. I I Competition from banks is! (now often reported as the! jmain reason for other financial institutions raising their b interest rates. I
i The scarcity of liquidity I throungh the larger-than- ; expected flow of funds to (the Government sector in ; March, however, remains the basic cause of the problem,! jsays the association’s! (director of research, Mr W.l A. Poole. Interest-bearing deposits iin April were S49IM or 38 (per cent higher at $1779M, :and non-interest bearing deposits rose S92M or 8 per icent to $1254M compared 'with April 1976.
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Press, 24 May 1977, Page 23
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309Bank liquidity improved Press, 24 May 1977, Page 23
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