RESERVE BANK

Wanganui Chronicle, Volume 83, Issue 35, 11 February 1939, Page 15

RESERVE BANK

STERLING FUNDS STILL LOWER RESERVE RATIO 25.047 PER CENT. MORE STATE BORROWING. The sterling exchange funds of the Reserve Bank of New Zealand totalled £N.Z.4,074,954, a decrease of £58,632. The bank’s net overseas funds amount to £4,063,984. The reserve is £45,354 lower at £6,865,775. The proportion of reserve to notes and other demand liabilities is down to 25.047 per cent., the lowest level yet reached. The total indebtedness of the State to the bank this week is £18,424,431, made up of £6,474,431 advances to the Primary Products Marketing Department, an increase of £316,262, and £11,950,000 of advances for “other purposes,” an increase of £850,000. The note issue at £15,206,254 shows a further decrease of £159,603. Government deposits at £3,237,983 are up £614,432, and the trading banks’ cash at £8,860,328 shows a further increase of £273,027. The statement of assets and liabilities of the Reserve Bank as at the close of business on Monday, February 6, is as follows: Liabilities £ s. <l. 1. Gen. Reserve Fund 1,500,000 0 0 2. Bank notes 15,206,254 10 0 3. Demand liabilities — (a) State 3,237,933 4 2 (b) Banks 8,860,327 17 9 (c) Other 106,884 4 4 4. Time deposits 5. Liabilities in currencies other than N.Z. currency 10,970 6 10 6' Other liabilities 333,299 10 7 £(N.Z.)29,255,719 13 8 Assets £ s. d. 7. Reservefa) Gold 2,801,791 0 0 *(b) Sterling exchange 4,074,954 2 3 (c) Gold exchange 8. Subsidiary coin .. .. 204,658 2 6 9 Discounts (a) Commercial and agricultural bills (b) Treasury and local body bills ... 10. Advances—(a) To the State or State undertakings— (l) Primary Products Marketing Dept 6,474,431 9 1 (2) For other purposes 11,950,000 0 0 (b) To other public authorities (c) Other 11. Investments 3,646,384 9 11 13. Other Assets 103,500 9 11 £(N.Z.)29,255,719 13 8 ’Expressed in N.Z. currency.

Proportion of reserve (No. 7 less No. 5) to notes and other demand liabilities, 25.047 per cent., compared with 25.75 per cent., on January 30, and 67.039 per cent, on February 7, 1938. The statutory limit is 25 per cent.

The reserve on Monday amounted to £6,865,775, compared with £6,911,129 on January 30, a decrease of £45,354. On February 7, 1938, the bank’s reserve amounted to £18,502,490. Sterling exchange expressed in New Zealand currency totals £4,074,954, compared with £4,133,586 on January 30, a decrease of £58,632. There are liabilities in currencies other than New Zealand currency this week amounting to £10,970 (a decrease of £13,277), thus reducing the net overseas assets of the Reserve Bank to £4,063,984. A year ago, the overseas assets amounted to £15,700,699. Gold remains unchanged at £2,801,791. Subsidiary coin totals £204,658, an increase of £8875. The £500,000 of Treasury bills discounted have been paid. Advances to the Primary Products Marketing Department amount to £6,474,431, an increase of £316,262. Advances to the State for “other purposes” have reached the high level of £11,950,000, an increase during the week of £850,000. Investments show an increase of £12,569, the total now being £3,646,384. tOher assets amount to £103,500, an increase of £8386.

A further contraction of £159,603 brings the note issue down to £15,206,254, but it is still £1,1.38,281 in excess of the total of £14,067,973 shown a year ago.

Demand liabilities to the State total £3,237,983, an increase on the week of £614,432. The trading banks’ reserve balances are up by another £273,027, and now amount to £8,860,328. Other demand liabilities at £106,884, show a decrease of £155,277. Other liabilities amount to £333,299, an increase of £78,158.

The statement balances at £29,255,720, an increase of £637,459. 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 exchange. £ (N.Z.) Reserve ratio, er cent. 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 Oct. 3 .. 10,594,978 57,259 oct. in i ... 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 Nov. 7 - 6,633,031 39.733 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 The statutory minimum of the reserve ratio is 25 per cent.