RESERVE BANK

Dominion, Volume 32, Issue 65, 9 December 1938, Page 14

RESERVE BANK

Major Decrease In Sterling Exchange TOTAL NOW £N.Z.4,200,856 State Advances Increase Ou Monday the sterling exchange funds of the Reserve Bank of New Zealand had dwindled to the low level of £N.Z.4,200,850, a decrease during the week ot £627.446. A year ago the total was £N.Z.16,184,027. The proportion of the bank’s reserve to notes and other demand liabilities has fallen to 20.834 per cent. The statement, of assets and liabilities of the lieserve Bank as at the close ot. business on Monday, December o, is as follows: — LIABILITIES. £ s. d.

»Expressed in N.Z. currency. Proportion of reserve (No. 7 less No. 5) to notes and other demand liabilities. 29.834 per cent., compared with 32.685 per cent, ou November 28, and 73.59 per cent., on December 6, 1937. The statutory limit is 25 per cent. The reserve on Monday amounted to £6,975,928, as compared with £7,610,213 on November 28, a decrease of £631,285. , Sterling exchange, expressed in New Zealand currency, shows another large decrease this week of £627,446, the total amount now held by the bank being £4,2'00.856, as against £4,828,302 on November 28. Gold remains unchanged at £2,801,791. Subsidiary coin totals £202.652, a further decrease of £3OBB.

Advances to the Primary Products Marketing Department total £5,486,872, a further increase of £464,430. Advances to the State for other purposes have increased by £lBO,OOO, and now total £8,680,000. Investments amount to £3,605,022, a further increase of £95,547. Other assets total £111,087, an increase of £2629.

The. note issue continues to expand and has now reached the high level of £14,694.982, an increase during last week of £107,618. The latest figure represents an increase of £730,639 on that of December 6, 1937, -when the note issue amounted to £13,964,343. Demand liabilities to the State total £2,687,670, a decrease of £310,087. The trading banks’ reserve balances stand at £5,7*16,378, an increase of £6.11,691. Other demand l liabilities, at £263,055, show a decrease of £300,311. Liabilities in currencies other than New Zealand currency amount to £23,719, an increase of £3839. Other liabilities total £172,476, an increase of £678. The statement, balances at £25,088,280, an increase of £112,073. Drain on Overseas Funds. The rapid decline in the sterling exchange held by the Reserve Bank of New Zealand during the last few weeks aud the decrease in the ratio' percentage of retserve to notes and other demand liabilities, are shown in the following table: —

The statutory limit of the reserve ratio is 25 per ecu I.

1. General reserve fund 1.500,000 O 0 2. Bank notes 14,094,982 10 0 3. Demand liabilities— 2.087,069 IS 11 (b) Banks 5.746,377 19 11 15 I 4. Time deposits 5. Liabilities in currencies other than N.Z. currency .. . 23,719 10 0 0. Other liabilities . . ■ 1 < 2,4 75 16 9 £N.Z. 25,OSS,280 11 2 ASSETS. £ d. 7. lieserve — (a) Gold 2,801,791 0 0 Sterling exchange 4,200.856 <> 0 (c) Gold exchange — 8. Subsidiary coin 202,652 1 3 0. Discounts — (a) Commercial and agricultural bills —— (b) Treasury and local body bills .. —— 10. Advances— (a) To the State or State undertakings: (i) Primary Products Marketing Dept 5,486.872 0 i (ii) For other purposes ..... S,OSO,000 0 0 (b) To other public authorities — —— 11. Investments .... 3,605,022 o 11 12. Bank buildings . . — 13. Other assets .... 111,086 18 £(N.Z.) 25,088.280 11 2

Sterling Deserve Aug. 29 exchange. £ (N.Z.) 13,695,000 ratio per cent. 67.2 Sept. 5 12,639,000 65.847 Sept. 12 12,681,343 66.428 Sept. 19 12,247,006 63.853 Sept. 26 11,449,447 60.785 Oct. 3 10.594.978 57.259 Oet. 10 9,900,233 57.903 Oet. 17 9*118,330 52.27 Oct. 24 8.313,575 48.4 51 Oet. 31 7,707,697 46.09 Nov. 7 6,633.031 39.733 Nov. 14 5.662,977 36.S25 Nov. 21 5:029,137 33.723 Nov. 28 4,828,302 32.685 ]>ee. 5 4.200,856 29.S34