RESERVE BANK

Wanganui Chronicle, Volume 83, Issue 29, 4 February 1939, Page 15

RESERVE BANK

STERLING EXCHANGE DOWN RESERVE RATIO 25.75’ PER CENT. INCREASE IN DAIRY ADVANCES Not yet is there any indication ol a building-up of the sterling funds of the Reserve Bank of New Zealand, which on Monday amounted to £4.133,586, a decrease on the week of £261,940. An increase of liabilities in currencies other than New Zealand to £24,248, brings the total o£ the bank's n°t ove.s r as assets down io £4,109,338. The reserve totals £6,911,129, a decrease of £262.870 and the proportion of reserve to notes and other demand liabilities is down io 25.75 per cent., as against 26.695 per cent, on January 23. Other features of the bank's statement are a further decrease in the note issue of £172,470, a decrease of £165,914 in State deposits, a further increase of £204,862 in the trading banks’ cash, and a rise of £291,453 in dairy produce advances. The statement of assets and liabilities of the Reserve Bank as at the close of business on Monday, January 30, is as follows:

(£ (N.Z. 128,618,260 16 0 ‘Expressed in N.Z. currency. Proportion of reserve (No. 7 less No. 5) to notes and other demanc liabilities, 25.75 per cent., compared with 26.695 per cent, on January 23. The proportion on January 31, 1935, was 67.321 per cent. The statutory limit is 25 per cent. The reserve on Monday amounted to £6,911,129, compared with £7,173,999 on January 23, a decrease of £262,870. On January 31, 1938, the bank’s reserve was £19,032,442. Sterling exchange expressed in New Zealand currency totals £4,133,586, compared with £4,395,526 on January 23, a decrease of £261,940. There are liabilities on currencies other than New Zealand currency this week amounting to £24,248 (an increase oi £930), thus reducing the bank’s net overseas assets to £-1,109,338. A year ago the Reserve Bank's sterling funds totalled £16,230,651. Gold remains unchanged at £2,801,791. Subsidiary coin amounts to £195,783, an increase of £3277. Treasury bills discounted show no change at £500,000. Advances to the Primary Products Marketing Department total £6,158,169, an increase of £291,453. Advances to the State for other purposes are unchanged at £11,100,000. Investments amount to £3,633,816, an increase of £30,516. Other assets at £95,115 show a decrease of £96,468. The note issue shows a further post-holiday decrease of £172,470 and now totals £15,365,858, which is still £1,125,813 in excess of that of a year ago. Demand liabilities to the State al £2,623,551 show a decrease of £165,914. A further increase of £204,862 on the trading banks’ reserve balances brings their total up to £8,587,301. Other demand liabilities amount to £262,161, an increase of £98,151. I Other liabilities total £255,142, an [ increase of £1279. The statement balances at £28,618,261, a decrease of £33,162. 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 in the ratio percentage of reserve to notes and other demand liabilities, are shown in the following table: —

The statutory minimum of tlie rc serve ratio is 25 per cent.

Liabilities s. d. £ 1. Gen. Reserve Fund 1,500,000 0 0 2. Bank notes 15,365,858 0 0 3. Demand liabilities— (a) State ....................... 2,623,551 5 G (b) Banks 8,587,300 13 d (c) Other 262,161 o / ■1. Time deposits - 5. Liabilities in currencies other than N.Z. currency 24,247 14 Z 6. Other liabilities 255,141 19 1 — £(N.Z. 128,618,260 16 J Assets £ s. d. 7. Reserve — (a) Gold 2,801,791 0 0 *(b) Sterling exchange 4,133,586 4 5 (c) Gold exchange 8. Subsidiary coin 195,783 10 4 b Discounts — (a) Commercial and agricultural bills — (b) Treasury and local body bills ... 500,000 0 0 10. Advances— (a) To the State or State undertakings— (1) Primary Products Marketing Dept 6,158,169 4 o (2; For other purposes 11,100,000 0 0 <b) To other public authorities (c) Other — 18 11. Investments 3.633,815 8 13, Other assets 95,114 18 4

Sterling exchange, t(N.Z.> Reserve ratio Sept. tn ... . ... 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 Nev. Nov 7 6,633,031 39.733 14 5 662,977 36.825 Nov. 21 5,029,137 33.723 Nov. 28 4,828,302 32.685 4,200,856 29.834 Dec. Dec. 12 4,572,301 30.333 19 4,368,095 28.109 Dec. 26 4,678,233 27.882 Jan. Jan. Jan. 2 4,017,232 26.13 9 3,933,851 25.52b 23 4,395,525 26.695 Jan. 30 4,133,586 25.75