RESERVE BANK ADVANCES

New Zealand Herald, Volume LXXVI, Issue 23274, 17 February 1939, Page 10

RESERVE BANK ADVANCES

Interest in the weekly Reserve Bank returns has been concentrated for some time on the level of the sterling exchange reserve, and recently, on the ratio of reserve to notes and other demand liabilities. These figures appear to have settled temporarily at the level of just over £4,000,000 for the one and a fraction above the statutory minimum of 25 per cent for the other. Meantime another item in the statements is reaching a striking level. Advances business is steadily expanding. Accommodation granted to the Primary Produce Marketing Department does not differ much from that shown at the corresponding date last year, being roughly £6,500,000. The other section of advances, to the State or State departments "for other purposes," has, however, expanded remarkably. The total under this heading, £12,050,000, in the return gazetted yesterday, is a record since the bank began making such advances. The figure has increased steadily in past months, having been only £2,900,000 at the end of August. It has been explained in the last two reports of the bank that accommodation under this head has been granted to the State against Treasury bills, or in other ways, for various objects, for housing, general purposes, and for other minor operations. In the past two years the indebtedness has been almost, or entirely, extinguished by the end of the financial year, but this has not involved anything like the amount of debt repayment in the last quarter as would be necessary this year. It will be interesting to note whether, having resorted so much more freely to short-term borrowing from the bank, the Treasury will be able to meet the* debt by March 31 as it has done before.