No. 22

519

[Coat of Arms]

SUPPLEMENT

TO THE

NEW ZEALAND GAZETTE

OF

THURSDAY, 7 FEBRUARY 1985

Published by Authority

WELLINGTON: FRIDAY, 8 FEBRUARY 1985

Trading Bank Reserve Asset Ratio

PURSUANT to section 33 of the Reserve Bank of New Zealand Act 1964, the Reserve Bank, acting with the approval of the Minister of Finance, hereby gives notice that as from the close of business on 1 February 1985 and until further notice each trading bank shall maintain during each calendar month balances at the Reserve Bank plus holdings of Reserve Bank notes, of New Zealand coin, and of New Zealand Government securities, such that the aggregate of the averages of those balances and holdings during that month (determined in accordance with clauses 1 to 7 of this notice) equals or exceeds the aggregate of:

27.0 percent of that trading bank's average demand and time deposit liabilities in New Zealand in the immediately preceding month (determined in accordance with the provisions of clause 6 of this notice);

Provided that a trading bank may make up its balances and holdings as aforesaid for a calendar month to the amount hereinbefore required for that calendar month by way of borrowings from the Reserve Bank made during the next following month and on terms and conditions to be determined by the Reserve Bank and the proceeds of all such borrowings shall be credited to the account of that trading bank with the Reserve Bank termed "Contra Deposit Account" and on terms and conditions to be determined by the Reserve Bank.

For the purposes of this notice:

1. Balances held by a trading bank at the Reserve Bank shall (subject to clause 7 of this notice) include both demand deposit balances and time deposit balances of that trading bank.

2. The average of a trading bank's holdings of Reserve Bank notes and of New Zealand coin for a calendar month shall be the average of the figures for those holdings recorded by the Reserve Bank for that trading bank as at each Wednesday in the month. For the purposes of this paragraph, the figures so recorded as at each Wednesday shall be the figures set out in the weekly return of banking statistics relating to the preceding Wednesday, supplied by the trading bank under the Statistics Act 1975.

3. The average of a trading bank's balances at the Reserve Bank shall be the average of the balances of that trading bank as at the close of business on each day of that calendar month, as recorded by the Reserve Bank after the settlement of all transactions which are recorded as having been effected on that day.

4. The average of a trading bank's holdings of New Zealand Government Securities for a calendar month shall be the average of the New Zealand Government Securities held by it on each day of that month, taking into account all transactions in New Zealand Government Securities with the Reserve Bank carried out for the purposes of settlement of the trading bank's current account at the Reserve Bank which are recorded by the Reserve Bank as having taken place on that business day.

5. For the purposes of this notice, the term "New Zealand Government Securities" shall mean Government Stock and Treasury Bills as these terms are defined in the Public Finance Act 1977 (all at nominal value), and any bonds, stock, or other securities issued by the Housing Corporation of New Zealand under section 30 of the Housing Corporation Act 1975 (all at nominal value), and any Government of Western Samoa stock issued and registered in New Zealand after the 1st day of August 1976 (at nominal value).

6. The average demand and time deposit liabilities of a trading bank in a calendar month shall be the average of the figures for days within that calendar month, as shown in that trading bank's weekly returns of Banking Statistics under the Statistics Act 1975.

7. The proceeds of any borrowings made by a trading bank pursuant to the proviso to this notice shall be deemed to be a part of and be included in the balances held by that trading bank at the Reserve Bank on the last day of the preceding calendar month;

And the proceeds of any such borrowing shall not be included in the balances held by that trading bank at the Reserve Bank for any other calendar month.

Dated at Wellington this 29th day of January 1985.
R. S. DEANE, Deputy Governor.

EXPLANATORY NOTE

This note is not part of the notice, but is intended to indicate its general effect.

This notice supersedes the notice, dated 21 December 1984, which fixed the trading bank reserve asset ratio and which was published in the Gazette of 7 February 1985 The notice, dated 21 December 1984, as published in the Gazette*, contained an error. The reference in it to 1 February 1985 should have been a reference to 1 January 1985. This error did not appear in the original of the notice.

\Gazette, 1985, p. 473