Reserve Bank of Australia Annual Report – 2020 Financial Statements Note 4 – Interest Income and Interest Expense

Analysis for the year ended 30 June 2020

  Average balance
$M		 Interest
$M		 Average annual
interest rate
 Per cent
Interest income
Foreign currency investments 69,718 339 0.5
Australian dollar investments 118,688 1,598 1.3
Overnight settlements 606 3 0.4
Cash collateral provided 434 2 0.4
Gold loans 736 1 0.1
Gold borrowed under gold swaps 60 1 1.7
Loans, advances and other 37 – 0.8
  190,279 1,944 1.0
Interest expense
Exchange Settlement balances 45,871 205 0.4
Deposits from governments 30,982 203 0.7
Deposits from overseas institutions 1,998 6 0.3
Banknote holdings of banks 4,250 19 0.5
Foreign currency repurchase agreements 838 12 1.4
Australian dollar repurchase agreements 196 1 0.6
Gold loaned under gold swaps 302 (1) (0.4)
Cash collateral received 173 1 0.7
  84,610 446 0.5
 
Net interest margin     0.8
 
Analysis for the year ended 30 June 2019
Interest income 163,598 2,310 1.4
Interest expense 65,036 1,034 1.6
Net interest margin     0.8

Interest income for 2019/20 includes $736 million calculated using the effective interest method for financial assets not at fair value through profit or loss ($1,646 million in 2018/19). Interest expense for 2019/20 includes $446 million calculated using the effective interest method for financial liabilities not at fair value through profit or loss ($1,034 million in 2018/19).