FINANCIAL IMPROVEMENT

Nelson Evening Mail, Volume LXXII, 21 January 1939, Page 7

FINANCIAL IMPROVEMENT

The note issue at £15,830,603, shows a I further contraction of £297,159, but is still £1,297,558 in excess of the total of £14,532,505 on 17th January, 1938. Demand liabilities to the State total £2,801, 145, an increase of £188,554. An increase of £631,496 brings the total of the trading banks’ reserve balances up to £8,012,808. Other demand liabilities amount to £133,961, a decrease of £119,727. Other liabilities total £237.432, an increase of £22,200. The statement balances at £28,518,379, an increase of £419,190. MOVEMENTS IN STERLING EXCHANGE The movements in the sterling exchange held by the Reserve Bank of New Zealand during the last few months and the decrease Li the ratio percentage of reserve to notes and other demand liabilities, are shown in the following table:—

SHOWN IN RESERVE BANK RETURNS In so far as the weekly returns of the Reserve Bank can be regarded as a financial barometer, weighing the vary- 1 ing pressures that are brought to bear ! on the economic position of the Domin- J ion, the stormy portents of the last few months are now passing away and the latest reading, as at 16th January, justifies the forecast “Improving” (com-! ments the “New Zealand Herald”). The | return published in this issue shows iiiiilMiiilmiiniWiiiimiiiiiiiiiTlMiiiiliiiiTiTiiiiiiiMiiiiiriiiiinniini

| (hat sterling balances have advanced in ; a week by more than £400,000, that the note issue, with the contraction of j the holiday demand, has fallen by near- ; ly £300.000, and that the proportion oi J the reserve to notes and oilier demand i liabilities, which last week was only a i fraction above the statutory minimum of 25 per cent., lias now risen to 26,782 per cent. The return does not indicate the entire disappear ancc cf disturbances which have been causing concern in rej cent months, but in the financial sense, i at any rate, improving conditions should become apparent in more marked fashion as the influence of exchange control becomes more assertive. Under J My- Nash’s economic plans, the proceeds; of all exports shipped after sth De- ' liliiiiiTliiiliMiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiilgiiiililliM

1 1 eember must be sold to the banks for t New Zealand currency, k> that eventualf ly the Reserve Bank will have control - of all sterling balances thus accruing, i Goods shipped since sth December are 1 only now beginning to find their way t on to the British markets and it is reai sonable to assume that future realisal tion* should have a steady effect in : building up the Dominion's London " funds. Interest payrr.enl* at the be&in- ■ ning of the year must have caused a , j fairly considerable drain on sterling I balances and. although further debt I charges will have to be met in Febru- * ary arid March, by that time some of • the ground lost as a result of three > years of lavish spending should be recovered TnrirnMiMiiimiiiiriiiHniiiiTnniiTniniiiiTiiiiiiiiiiiiiiiuiiiifuawii

Sterling Reserve exchange. ratio £(N.Z.) per cent. 1937 Dec 27 16,992,748 70.323 1938. Aug. 29 .. 13,695,000 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 Oct. 10 . 9.900.233 57.903 Oct. 17 .. 9.118.330 52.27 Oct 24 .. 8.313.575 48.451 Oct 31 .. 7.707.697 46.09 Nov, 7 .. 6.633.031 39.733 Nov 14 .. 5.662.977 36.825 Nov. 21 .. 5.029.137 33.723 Nov 28 .. 4.828.302 32.685 Dec 5 .. 4.200.856 29.834 Dec. 12 .. 4.572.031 30.333 D ec. 19 . 4.368.095 28.109 Dec.- 26 .. 4.678.233 27.882 Tan 2 . 4.017.232 26.13 Tan. 9 . 3.933.851 25 .’526 Jan. 16 .. 4.373.105 26.782 The statutory minimum of the reserve ”atio is 25 per cent. nifijLiiiiiTiiiiiiiifiiiiiiiiiiiiiiiiiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiuiiiHiiiiiiiiiiiiiiiiiiHia