Note 4 – Interest Income and Interest Expense | Financial Statements | Reserve Bank of Australia Annual Report – 2016

Reserve Bank of Australia Annual Report – 2016 Financial Statements Note 4 – Interest Income and Interest Expense

Analysis for the year ended 30 June 2016.

Interest income
	Average balance $M	Interest $M	Average annual interest rate per cent
Foreign currency investments	63,013	189	0.3
Australian dollar investments	86,152	2,098	2.4
Overnight settlements	342	6	1.7
Cash collateral provided	563	11	1.9
Gold loans	195	1	0.2
Loans, advances and other	23	–	1.6
	150,288	2,305	1.5
Interest expense
Exchange Settlement balances	23,552	458	1.9
Deposits from governments	29,280	581	2.0
Deposits from overseas institutions	2,363	17	0.7
Banknote holdings of banks	2,913	50	1.7
Foreign currency repurchase agreements	3,313	4	0.1
Australian dollar repurchase agreements	66	1	2.0
Cash collateral received	95	1	2.0
Other deposits	14	–	1.0
	61,596	1,112	1.8
Net interest income	88,692	1,193	1.3
Analysis for the year ended 30 June 2015
Interest income	135,194	2,165	1.6
Interest expense	56,439	1,245	2.2
Net interest income	78,755	920	1.2

Interest income for 2015/16 includes $1,503 million calculated using the effective interest method for financial assets not at fair value through profit or loss ($1,625 million in 2014/15). Interest expense for 2015/16 includes $1,112 million calculated using the effective interest method for financial liabilities not at fair value through profit or loss ($1,245 million in 2014/15).