Reserve Bank of Australia Annual Report – 1968 Public Statements

During the period under review public statements elating to the following policy matters were issued by the Bank:

12 September 1967

Finance for projects of national importance: The Australian Resources Development Bank Limited was to be established to provide finance to Australian enterprises engaged in the development of natural resources. The Resources Bank would accept deposits in Australia for fixed periods and seek to raise funds overseas; it would make direct loans and refinance loans made by the trading banks.

The Reserve Bank was to provide loan capital to assist the Resources Bank become an operative entity. It was intended to progressively reduce and eventually eliminate the Reserve Bank financial participation. Lending and interest rate policies would be formulated in consultation with the Reserve Bank and be subject to Reserve Bank policy requirements.

The Resources Bank should improve the capacity of the Australian capital market to provide medium-term finance in large amounts.

16 February 1968

Term lending: Term Loan Fund Accounts of major trading banks were to be increased by about $40 million, of which about $29 million was to come from the Statutory Reserve Deposits of the banks and the balance from banks' other assets before the end of February. The Statutory Reserve Deposit ratio was to be reduced from 8.9 per cent to 8.4 per cent—effective 19 February.

8 April 1968

Farm development lending : Farm Development Loan Fund Accounts of major trading banks were to be increased by about $37 million, of which about $23 million was to come from the Statutory Reserve Deposits of the banks and the balance from the banks' other assets by early May. The Statutory Reserve Deposit ratio was to be reduced from 8.4 per cent to 8.0 per cent—effective 9 April.

21 May 1968

Lease financing: Approval was granted for trading banks to undertake lease financing on a modest scale and subject to normal lending policy requirements. Interest rates would be determined in consultation with the Reserve Bank, but would not be subject to maximum overdraft interest rate arrangements.

26 June 1968

Trading bank fixed deposit interest rates: From 27 June 1968 maximum interest rates payable on fixed deposits lodged with trading banks would be increased by 0.25 per cent per annum. The changes were designed to maintain the relative attractiveness of bank deposits.

10 July 1968

Savings bank interest rates: The maximum interest rate payable on savings bank deposits would be increased by 0.25 per cent from 1 August 1968. Increases of up to 0.5 per cent in some savings bank lending rates might follow.