RESERVE BANK

Nelson Evening Mail, Volume LXXIII, 10 June 1939, Page 13

RESERVE BANK

RESERVE RATIO, 29.655 PER CENT.

LARGE INCREASE IN STERLING EXCHANGE A substantial improvement of £1.318.102 in the sterling exchange funds of the Reserve Bank of New Zealand brought the total amount up to £5.882.308 on Monday, the highest level since 14th November. The proportion of reserve to notes and other liabilities was 29.655 per cent., as against 25.136 per cent, on 29th May. and the best position since 12th December. Other features of , the bank’s statement are a large decrease in dairy produce advances, an increase of £IOO.OOO in advances to the State for other purposes, advances other than to the State or public bodies of £200.000, and a large increase in State deposits. The statement of assets and liabilities of the Reserve Bank as at the close of business on Monday, sth June is:—

♦Expressed in N.Z. currency. Proportion of reserve (No. 7 less No. 5/ to notes and other demand liabilities. 29.655 per cent., compared with 25.136 per cent, on 29th May ■'id 77.906 per cent, on 6th June, 1938. The reserve on Monday amounted to £8,661.125. compared with £7.323.148 on 29th May, an increase of £1.337.977. On 6th June. 1938. the bank’s reserve totalled £20.603.377. Sterling exchange on Monday had risen to £5.882.308. an increase for the week of £1.318.102. bringing it up to the highest level shown since 14th November. 1938. when the figure was £5,662.977. Liabilities in currencies other than New Zealand currency on Monday amounted to £23.022 (a decrease of £19.875). thus making the bank’s net overseas assets £5,859.286, an increase for the week of £1.337.977. A year ago the bank’s net overseas assets totalled £17.801.586 The bank’s gold holding is unchanged at £2.801,839. Subsidiary coin amounts to £220.597. a decrease of £2235. A substantial decline of £1.504,654 is shown in the advances to the Primary Products Marketing Department, which on Monday totalled £5.987,695, as against £7,492,349 on 29th May. The decrease probably is accounted for by realisations in London and reduced shipments from New Zealand.

Advances to the State for “other purposes'’ amount to £12.125,000. an increase of £IOO.OOO. For the first time an amount of £2OO.- j 000 appears under the heading of 1 “other’’ advances, i.e., outside the State i or other public authorities. Investments at £3.766,914 show a re- i auction of £3875. Other assets total \ £249.963, an increase of £108.920. j The note issue totals £15.597,365, an j increase of £25.315. The present total is £1.765.082 above that of £13.832,283 a year ago. Demand liabilities to the State total £4 613.816. compared with £2.549,542 on 29th May, the large increase being due to payments of social security taxThe trading banks’ cash balances j amount to £8,484.725, a further decrease \ d of £944.054. Other demand liabilities ! t at £510.069 show a decrease of £1073.611. c Other liabilities total £505.219, an in- n crease of £164,210. * The statement balances at £31,234,216, an increase of £216,258. MOVEMENTS IN STERLING EXCHANGE e The movements in the sterling exchange held by the Reserve Bank of q | New Zealand during the last few F months and the decrease in the ratio percentage of reserve to notes and other . : demand liabilities, are shown in the fol- c j lowing (able: —

LIABILITIES £ s. cl. I. General reserve fund 1.500.000 0 0 2. Bank notes 15.597.365 0 0 S. Demand liabilities — (a> State 4.613.816 4 7 I (b) Banks 8.484.724 17 o 1 (c) Other 510.068 13 3 4. Time deposits 5. Liabilities in currencies other than N.Z. currency 23.021 17 10 i 6. Other liabilities 505,219 2 1 ! £ (N.Z. >31,234,215 14 9 1 ASSETS £ s. d. 7. Reserve — (a) Gold 2.G01.839 0 o ; *(b) Sterling exchange 5.882.307 18 4 (e) Gold exchange — 8 Subsiduarv coin 220,596 12 0 9. Discounts — (a> Commercial and agricultural bills — » (b) Treasury and — local body bills —• 10. Advances — (a> To the State oi State undertakings: (1) Primary Products Marketing Department 5.987,695 0 2 (2) For other purposes 12,125,000 0 0 (b > To other publie authorities — — (c) Other 200.000 0 0 11. Investments 3,766,914 0 0 12. Bank buildings — 13 Other assets 249.963 4 3 £ (N.Z. >31,234.215 14 9

193" Sterling exchange £(N.Z.) Reserve j ratio j per cent, j Dfcr. 27 1938— .. 16.992.748 70.323 | Aug. 29 .. 13 695.000 67.2 ; Sent. 26 .. 11449 447 60.785 1 Oct. 31 .. 7.707.697 46.09 1 Nov 28 .. 4.828.302 32.685 i Dec 26 ! 939 — .. 4.678.233 27.882 Jan 2 .. 4.017.23? 26.13 | Jan 9 .. 3.933.851 25.526 Jan 16 .. 4.373.705 26 782 Jan 23 .. 4.395.525 26.695 Jan 30 .. 4.133.586 25.75 Feb 6 .. 4.074.954 25.047 Feb 1.3 .. 4.164.499 25.073 Feb 20 .. 4.523.031 25.378 Feb 27 .. 4.839.535 25.799 War 6 4.705 897 25.017 Mar 13 .. 4.591.686 25.026 Mar. 20 .. 4.547 863 25.129 Mar. 27 4.659.874 25 419 Anr. 3 .. 4 663 306 25.924 Apr 10 4.508.65? 25.501 Anr. 17 .. 4.872 818 26.305 Anr. 24 k... ... 4.659.061 25.11 May 1 .. 4.817.992 25.815 May 8 ..... 4,7U8,70c :o.i22 May ... 4,695.194 5 499 May 22 ... 4.758.544 26.611 May 29 ... 4.564.206 25.136 June 5 .... 5.882.308 29.655 The statutory ratio is 25 minimum ol per cent. the re-