RESERVE BANK

Wanganui Chronicle, Volume 83, Issue 53, 4 March 1939, Page 15

RESERVE BANK

STERLING EXCHANGE INCREASES

MORE STATE BORROWING RESERVE RATIO 25.799 PER CENT. The sterling exchange funds of the Reserve Bank of New Zealand on Monday totalled £N.Z.4,839,555, an increase last week of £N.Z.316,524. The bank’s net overseas funds amount to £N.Z.4,801,756. The proportion of reserve to notes a*nd other demand liabilities is fractionally higher at 25.799 per cent. i Advances to the Primary Products Marketing Department have risen by a further £154,057 and now total £6,870,592. Advances to the State for "other purposes” have increased by £300,000 to the high level of £12,800,000. The note issue at £14,905,615 is higher by £17,218. State deposits at £4,017,927 show an increase of £363,296, and the trading banks’ cash reserves at £10,467,414 are higher by £364,277. The statement of assets and liabilities of the Reserve Bank as at the

close of business on Monday, February 27, is as follows: Liabilities £ s. d.

"Expressed in New Zealand currency. Proportion of reserve (No. 7 less No. 5) to notes and other demand liabilities, 25.799 per cent., edmpared with 25.378 per cent, on February 20 and 68.804 per cent, on February 28, 1938. The reserve on Monday amounted to £7,603,547, compared with £7,290,170 on February 20, an increase of £313,377. On February 28, 1938, the reserve stood at £20,050,296. Sterling exchange expressed in New Zealand currency this week amounts to £4,839,555, compared with £4,523,031, on February 20, an increase of £316,524. There are liabilities in currencies other than New Zealand currency this week of £37,799 (an increase of £3147), thus reducing the net overseas assets of the Reserve Bank to £4,801,756. A year ago the overseas assets of the bank amounted to £17,248,505. Gold remains unchanged at £2,801,791. Subsidiary coin at £204,821, shows an increase of £1094. Advances to the Primary Products Marketing Department total £6,870,592, an increase of £154,057. Advances to the State for "other purposes” have risen to the high level of £12,800.000, an increase during the week of £300,000. Investments at £3,651,172 are lower by £967. Other assets at £116,349 show a decrease of £21,571. The note issue has increased by £17,218 to £14,905.615. at which figure it is £1,133,527 in excess of the td’tai of £13,772,088 on February 28, 1938. Demand liabilities to the State at £4,017,927, show a further increase of £363,296. The trading banks' reserve balances now total £10,467.414, an increase of £364,277. Other demand liabilities amount to £81,205, an increase of £995. Other liabilities at £274,320 show an increase of £204. I The statement balances at £31,284,1 281, an increase of £749,137. 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:— Sterling Reserve exchange, ratio. £ (N.Z.) percent. 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 iOct. 3 10,594,978 57,259 Oct. 10 9,900,233 57.903 I Oct. 17 9,118,330 52.27 [Oct. 24 8,313,575 48.451 lOct. 31 7,707,697 46.09 I Nov. 7 6,633,031 39.733 I 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 Dec. 19 4.368,095 28.109 Dec. 26 4,678,233 27.882 1939. Jan. 2 4,017,232 26.13 Jan. 9 3,933,851 25.526 Jan. 16 4,373,105 26.782 Jan. 23 4,395,525 26.695 Jan. 30 4,133,586 25.75 Feb. 6 4,074,954 25.047 Feb. 13 4,164,499 25,073 I Feb. 20 4,523,031 25,378 Feb. 27 4,839,555 25.799 I The statutory minimum of the reserve ratio is 25 per cent.

1. Gen. Reserve Fund 1,500,000 0 0 2. Bank notes 14,905,615 0 0 3. Demand liabilities — (a) State 4,017,927 0 2 (b) Banks 10,467,414 6 1 (c) Other 81,204 18 4 4. Time deposits — 5. Liabilities in currencies other than N.Z. currency 37,799 7 8 6. Other liabilities 274,320 1 3 £(N.Z.) 31,284,280 13 6 Assets £ s. d. 7. Reserve— (a) Gold 2,801,791 0 0 *(b) Sterling exchange 4,839,555 1 8 (c) Gold exchange — 8. Subsidiary coin 204,820 17 0 9 Discounts —

(a) Commercial and agricultural bills (b) Treasury and — local body bills ... — 10. Advances— (a) To the State or State undertakings— (1) Primary Products Marketing Dept. 6.870,592 4 (2) For other purposes 12,800,000 0 0 lb) To other public authorities . . — (c) Other 11. Investments 3,651,172 1 2 12. Bank buildings — 12. Bandftt t6’ ?-; yo 13. Other assets .. Z 116,349 9 1 £(N.Z.) 31,284,280 13 6