RESERVE BANK.

Manawatu Standard, Volume LIX, Issue 21, 23 December 1938, Page 12

RESERVE BANK.

DECREASE IN STERLING EXCHANGE. TREASURY BILLS DISCOUNTED. That-the drain on the sterling exchange fupds oy the Reserve Bank of New Zealand has not yet ceased is shown in the latest return, the amount held on December 19 being £4,368,095,, a decrease c.f £203,936, as against an increase of £371,175 for the previous week. Tile proportion' of the bank’s reserve to notes and other demand liabilities is- down to 28,109 per cent. Advances to the State show another major increase and discounted Treasury bills total £500,000, an increase of £200,000. «The statement of assets and liabilities of the Reserve Bank as at the close of business on -Monday, December 19, is as follows:

in Now Zealand currency.

Proportion of reserve (No. 7 less No. 5) to notes and other demand liabilities, 28.109 per cent., compared with 30.333 per cent, on December 12, and 70.323 per cent, on December 27, 1937. The statutory limit is 25 per cent. The reserve on Monday amounted to £7,153,602, compared with £7,363,723 on December 12, a decrease of £210,121.

Sterling exchange expressed in New Zealand currency again shows a decrease. The holding on Monday was £4,368,095, compared with £4,572,031 on December 12, a decrease of £203,936. Sterling funds on December 27, 1937. totalled £16,992,748. Gold remains unchanged at £2,801,791. Subsidiary coin continues to decrease, the latest amount of £193,667 representing a decline on tho week of £6648.

Treasury bills discounted by the Reserve Bank total £500,000, an increase of £200,000 since December 12, when the item appeared for the first lime. Advances to the Primary Products Marketing Department amount to £5,184,588, an increase of £172,000.

Advances to the State for “other purposes”. have reached the high level of £10,400,000, representing a further increase during the week of £1,040,000. Investments remain unchanged at £3,605, 022. Other assets total £108,505, a decrease of £5411. The note issuo has reached a record high level of £16,298,740, an increase during the week of £1,102.977. The latest figure is already £1.065,613 in excess of the previous high record of £15,233,127 set during the Christmas week of 1937. Demand liabilities io the State total £2,542,987, a decrease of £490,637. The trading banks’ reserve balances stand at £6,426,619, an increase of £710,991. Other demand liabilities at £180,805 show a decrease of £149,947. Liabilities in currencies other than New Zealand currency amount to £16.284, an increase of £6185. Other liabilities at £196,233, an increase of £16,435. The statement balances at £27,161,669, an increase of £1,196,005. STERLING EXCHANGE FUNDS.

The decline in the sterling exchango hold by the Reserve Bank of New Zealand during the last few weeks and the docrease in the ratio percentage of reserve to notes and other demand liabilities are shown in the following table:

The statutory limit of the reserve ratio is 25 per cent.

LIABILITIES. £ s d 1. General reserve fund ... 1,500.000 0 0 2. Bank notes 16.298.740 0 0 3. Demand Liabilities — (a) Slate 2,542.987 6 0 (b) Banks '. 6,426,619 10 7 (cj Other 180,804 17 10 4. Timo Deposits — 5. Liabilities in currencies other than N.Z. currcncy 16.284 1 0 6. Other liabilities 196,233 3 8 £(N.Z.) 27,161,668 19 1 ASSETS. 7. Reserve— £ s d (a) Gold 2.801,791 0 0 (b) Sterling exchange . *4,368,094 17 5 (c) Gold exchange — 8. Subsidiary coin 193,667 3 10 9. Discounts — (a) Commercial a n d Agricultural Bills ... — (b) Treasury and local body bills 500,000 0 0 10, Advances— (a) To tho State or State undertaking— (i) Primary P r oducts Marketing Dept 5,184,588 2 2 (ii) For other purposes 10,400,000 0 0 (b) To other public authoritics • (c) Oltior — 11. Investments 3,605,022 5 11 12. Bank buildings — 13. Other assets 108,505 9 9 £(N.Z.)27,161,668 19 1

Sterling Reserve exchange. ratio. £ (N.Z.) per cent. 1938. Deo. 27. .. ... 16,992,748 70.323 Aug. 29 ... ... 13,695,000 67.2 Sept. 5 ....: ... 12,639,000 65.847 Sept. 12 .. 66.428 Sept. 19 .. ... 12,247,006 63.853 Sept. 26 .. ... 11,449,447 60.785 Oct. 3 ... 10,594,978 57.259 Oct. 10 ... 9,900,233 57.903 Oct. 17 ... 9,118,330 52.27 Oct. 24 .... 48.451 Oct. 31 ... 7,707,697 46.09 Nov. 7 39.733 Nov. 14 ... 36.825 Nov. 21 ... ... 5,029,137 33.723 Nov. 28 ... ... 4,828,302 33.685 Dec. 5 ... 4,200,856 29.834 Dec. 12 ... 30.333 Dec. 19 ... 4,368,095 28.109