Reserve Bank of Australia Annual Report – 1985 The Bank's Accounts


Economic factors affecting the Bank's accounts in 1984/85 are discussed in earlier sections of the Report. Major changes in the Bank's accounting practices commenced in the previous year were carried further: where practicable, all the Bank's assets are now valued at market prices. The effects of these changes are explained in the notes to the accounts.

Over the year there was an increase of $4.8 billion (28 per cent) to $21.7 billion in the consolidated balance sheet.

The growth in assets was mainly in holdings of Commonwealth bonds, which rose by $3.6 billion to $5.6 billion. There was also an increase of $1.0 billion in gold and foreign exchange, reflecting unrealised increases in values arising from depreciation of the Australian dollar. Loans, advances and bills discounted fell by $0.4 billion with loans to the money market and to Rural Credits Department customers both being lower than a year earlier.

On the liabilities side, Australian notes on issue again rose strongly by $1.0 billion (14 per cent) in 1984/85 ($0.8 billion in 1983/84). Deposits were about $0.9 billion higher than a year earlier. Asset revaluation reserves, relating mainly to foreign exchange and to a lesser extent to gold, as detailed in the notes to the accounts, increased by some $2.0 billion. In 1983/84, these reserves fell by $0.2 billion.

There was a substantial lift in the Bank's net operating earnings in 1984/85; they almost doubled, rising from $1,039 million to $1,956 million. The Bank was a net seller of foreign currencies during the year, at prices above those at which they had been purchased, and realised gains on those sales accounted for $771 million or 84 per cent of the increase in net earnings. There was little change from the previous year in average yields on domestic and foreign investments.

In view of the volatility of asset values, substantial ($279 million) provisions against future contingencies were made at the end of the year. An amount of $70 million was also added to the Bank's Reserve Fund bringing it to $101 million. These transfers left $1,595 million for payment to the Commonwealth, compared with $1,009 million a year earlier.