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NET OVERSEAS ASSETS The following table shows changes in the amount of the net overseas assets of the banking system during the financial year ended 31st March, 1950 . •

Net Overseas Assets* (Reserve Bank and Trading Banks) (£000)

Net overseas assets held by the banking system at the end of the financial year, £67-42 millions, were approximately the same as at the beginning, £67-45 millions. The pattern shown by the figures is due mainly to seasonal factors. From January until June net overseas assets normally increase steadily because overseas receipts exceed payments during those months. Export proceeds are at a relatively low level from August until December, while imports show a rising tendency in the last quarter of the calendar year. The Reserve Bank acquires foreign exchange resulting from the sale of exports through official marketing channels —principally dairy-produce and meat —and the proceeds are usually more than sufficient to meet the Government's requirements of foreign exchange. On the other hand, the trading banks acquire foreign exchange resulting from the sale of other exports and from most " invisible " receipts, but these are not sufficient to meet the public's demand for funds to pay for imports and other remittances. Therefore the Reserve Bank sells sterling to the trading banks from time to time in order to keep them supplied with sufficient working balances to meet current requirements.

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Last Wednesday in Month. Reserve Bank. Trading Banks. | Total. 1949 • March 50,697 | 16,749 67,446 April .. 53,607 16,730 70,338 May . - 58,233 16,598 74,830 June .. 58,923 13,623 72,546 July :. 55,295 15,281 70,576 August 50,872 13,435 64,307 September 47,559 11,166 58,725 , October 42,094 12,691 54,785 November 39,589 13,141 52,730 December 37,024 15,320 52,344 1950 January 40,928 16,498 j 57,426 February 43,257 18,125 61,382 March 47,319 20,100 67,419 1 * Reserve Bank's i business, less overseas sterling exchange and trading banks' assets overseas in respect of New Zealand liabilities.