THE BANKING POSITION

Wanganui Chronicle, Volume 83, Issue 47, 25 February 1939, Page 15

THE BANKING POSITION

INCREASE IN OVERSEAS FUND HEAVY BORROWING BY STATE TRADING BANKS’ ADVANCES DOWN There are some abnormal features in the banking position oi the Domin-

ion as revealed by the weekly statement of the Reserve Bank of NewZealand and tile latest returns of the six trading banks at January 30. The Reserve Bank statement shows that as at Monday its sterling funds had increased by £358,531 during the week to a total of £N.Z.4,523,031. The bank's reserve was then £7,290,170, an increase of £336,546 for the week, while the proportion of reserve to notes and otner demand liabilities had improved practically to 25.378 per cent. The note issue at £14,888,J91 was £222,514 lower, but was still £1,098,642 in excess of that of 12 months ago. Advances to the Primary Produce Marketing Department at £6,716,535 were up by £164,185. Advances to Instate for “other purposes” increased by £450,000 last week to the unprecedently high level of £12,500,000. £he State’s total indebtedness to the Reserve Bank last Monday was thus £19,216,535. The trading banks' returns give evidence of further Government indebtedness, their total holdings of Government securities at January .30, having increased during Ihe preceding five weeks to £9,562,679, an expansion of £BOO,OOO. 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 tablet-

gate discounts on January .30 were £772,035, as against £669,339 on December 26. an increase of £102,716. The total of advances and discounts in New Zealand on January 30 was £56,187.036, compared with £57,797,407 on December 26, a net decrease of £1,610,371. The excess of demand and time liabilities in New Zealand over aggregate advances and discounts on January 30 was £9,923,166, compared with £6.172,365 on December 26. The ratio of aggregate advances and discounts to total demand and time liabilities in New Zealand on January 30 was 84,989 per cent., compared with 90.356 per cent, on De-

cember 26, 93.709 per cent, on November 28 and 92.923 per cent, on October 31. The November figure wa; the highest for many years. The lowest point reached was 55.95 per cent in August, 1934.

The aggregate unexercised overdraft authorities on January .30 amounted to £22,215,547, as against £21,200,722 on December 26, an increase of £1,014,825. The total of advances and discounts and unexercised overdraft authorities on January 30 was £78,402,583, as against £78,998,129 on December 26, a decrease of £595,546. The active note circulation on January 30 amounted to £10,975,132, as against the record high level of £13,069,760 on December 26. a reduction of £2,094,628. The latest figure is £1,314,320 in excess of the note circulation of £9,660,812 on January 31, 1938.

The statutory minimum of the reserve ratio is 25 per cent. Net Overseas Funds. The trading banks’ rturns show that at January 30, their London funds had increased by f 1,285,429 since December 26, to a total of £4,170,664; but overseas funds elsewhere than in London had decreased by £420,062 to £1,794,070. Thus the total overseas funds show a net increase of £965,36 the total being £5,964,734. Against this amount were demand and time liabilities overseas amounting to £2,817,368, thus reducing the net overseas assets of the trading banks to £3,147,366, an increase of £998,963 on the amount of £2,148,403 shown on December 26. The following table shows the net overseas assets held by the Reserve Bank and the six trading banks and the totals of the two on the last Monday of each month of the current

11939. Jan. 4,109,338 3.147.3G6 7,256,701 Deposits Higher; Advances Lower The trading banks returns show that aggregate advances and discounts on January 30 totalled £56,187,036, a decrease ot £1,610,371 in live weeks. The banks’ demand liabilities at January 30 totalled £36,175,876, an increase of £2,004,111. and the time liabilities were £29,934,326, an increase ot £136,319. The total ot demand and time deposits was thus £66,110,202, as compared with £63,969,772 on December 26, a total increase of £2,140,430. The excess ot demand and time deposits over aggregate advances and discounts on January 30 was £9,923.166. The ratio of advances and discounts to total deposits was 84.989 per cent, compared with 90.356 per cent on December 26 and 93.709 per cent on November 28.

Sterling Reserve exchange ratio 1937. £ (N.Z.l per cent Dec. 27 .... . 1938. .. 16,992,748 70,323 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 63.833 Sept. 26 1 1,449,447 60.785 Oct. 3 . 10,594,978 t) (.2o J Oct. 10 . 9,900,233 57.903 Oct. 17 . 9,118,330 52.27 Oct. 24 8.313.575 48.45. 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 32.6S5 Dec. 5 4,200,856 29.831

Dec. 12 4,572,031 30.333 Dec. 19 4,368,095 28.109 Dec. 2G 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 Feb. 20 4,523,031 25.378

year: Reserve Bank. Trading Banks. Total 19.38. £ (N.Z.) £ (N.Z.1 £ (N.Z.) Jan. 16,231,000 6,755,000 22,985,000 Feb. 17,249,000 8,269,000 25,518,000 Mar. 16,930,000 9,6.35,000 26,565,000 Apr. 18,327,000 10,290,000 28,617,000 May 18.279,000 9,825,000 28,104,000 ■June 16,609,000 9,516,000 26,126,000 July 15,098,000 8,238,000 23,336,000 Aug. 13,687,000 6,868,000 20.555,000 Sept. 11,432,000 5,594.000 17,026,000 .Oct. 7,699,800 4,155.675 11,855,475 Nov. 4,808,422 3,072,939 7,881,361 Dec. 4,658,330 2,148,403 6,806,733