RESERVE BANK

Wanganui Chronicle, Volume 83, Issue 1, 3 January 1939, Page 11

RESERVE BANK

INCREASE IN STERLING EXCHANGE MORE STATE BORROWING A check to the drain on the sterling exchange funds of the Reserve Bank of New Zealand is apparent in the latest return, the amount held on December 26 being £N.Z.4,678,233, an increase of £310,138. The proportion of the bank’s reserve to notes and other demand liabilities is down to 27.882 per cent. Advances to the State show another large increase. The note issue has reached the record high level of £16,641,425. The statement of assets and liabilities of the Reserve Bank as at Monday, December 26, is as follows: Liabilities

Proportion of reserve (No. 7 less No. 5) to notes and other demand liabilities, 27.882 per cent., compared with 28.109 per cent, on December 19, 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 £7,640,121, compared with £7,153,602 on December 19, an increase of £305,519. Sterling exchange expressed in New Zealand currency, shows an increase of £310,1-38. The holding on Monday was £4,678,233, as compared with £4,368,095 on December 19. A year ago the bank’s sterling funds amounted to £16,992,748. Gold remains unchanged at £2,801,791. Subsidiary coin con-1 tinues to decrease, the latest amount of £188,666 showing a decline on the week of £5OOl. ' Treasury bills discounted show no change at £500,000. Advances to the Primary Products Marketing Department total £5,257,018, an increase of £72,430. Advances to the State for “other purposes” show another substantial increase of £BOO,OOO, the total now standing at the high level of £11,200,000. Investments remain unchanged at £3,605,022. Other assets total £250,969, an increase of £142,463. The note issue, due to Christmas week demands, has reached the record high level of £16,641,425, an increase since December 19 of £342,685. The latest figure is £1,408,298 in excess of the previous high record of £15,233,127 established during the Christmas week of 1937. Demand liabilities to the State total £2,842,163, an increase of £299,176 The trading banks' reserve balance amounts to £7,193,226, an increase of £766,607. Other demand liabilities at £79,106, show a decrease of £101,698. Liabilities in currencies other than | New Zealand currency amounted to £19,903, an increase of £3619. Other liabilities £205,874, an increase of £9641, The statement balances at £28,481,699, an increase of £1,320,030. Sterling Exchange Funds The decline in the sterling exchange held by the Reserve Bank of New Zealand during the last few weeks and the decrease in the ratio percentage of reserve to notes and other demand liabilities, are shown in the following table:— Sterling Reserve exchange, ratio £(N.Z.) perceni. 1937. December 27 16,992,748 70.323

£ s. d.l 1. Gen. Reserve Fund 1,500,000 0 Q 2. Bank notes 3. Demand liabilities— 16,641,425 10 (a) State 2,842,163 8 41 (b> Banks 7,193,226 10 11 (c) Other .... 4. Time deposits 5. Liabilities in currencies other than 79,106 8 0 N.Z. currency 19,902 19 2 6. Other liabilities 205,874 5 7 £N.Z.28,481,699 Assets. 2 0 7. Reserve— £ s. d. 1 (a) Gold *(b) Sterling ex2,801,791 0 0 change (c) Gold exchange 4,678,232 18 6 8. Subsidiary coin 9 Discounts — (a) Commercial and agricultural bills (b> Treasury and 188,665 16 2 local body bills .. 10. Advances— (a) To the State or State undertakings— (1) Primary Products Market500,000 0 0 ing Dept (2) For other 5,257,018 0 8 purposes (bl To other public authorities . (c) Other 11,200,000 0 0 11. Investments 12. Bank buildings 3,605,022 a 11 13. Other assets - 250,969 0 9 fN.Z.28,481,699 2 0

1938. August 29 13,695,000 67.2 September 5 12,639,000 65.847 September 12 12,681,343 66.428 September 19 12,247,006 63.853 September 26 11,449,447 60.785 October 3 19,594,978 57.259 October 1 9,900,233 57.903 October 1 ’ _ 9,118,330 52.27 — 8.313.575 48.451 7,707,697 46.09 November 7 6,633,031 39.733 November 14 5,662,977 36.825 November 21 5,029,137 33 723 November 28 4,828,302 32.685 December 5 4,200,856 29.834 December 12 4,572,031 30.333 December 19 - 4,368,095 28.109 December 26 4,678,233 27.882