Liabilities and Assets – Monthly

Liabilities:

‘Capital and Reserve Bank Reserve Fund’ whereby the Reserve Bank Reserve Fund (RBRF) is a general reserve. RBRF provides for potential losses arising from events which are contingent and non-foreseeable, mainly those which arise from movements in market values of the RBA’s holdings of Australian dollar and foreign securities as well as from fraud and other non-insured losses or events. On 1 July 2001 the amount of $3 323 million (Contingencies and General Purpose Reserve) was transferred from ‘Other liabilities’ to ‘Capital and Reserve Bank Reserve Fund’.

Prior to July 1996 the series ‘Exchange settlement balances’ primarily reflected deposits of Australian banks, comprising non-callable deposits and, prior to September 1988, Statutory Reserve Deposits and deposits by savings banks. The Statutory Reserve Deposit requirement on trading banks was removed in 1988 and the non-callable deposit requirement was abolished in July 1999. The Bank commenced paying interest on Exchange settlement balances in July 1996.

‘RBA term deposits’ are short-term deposits of institutions holding an Exchange Settlement Account and authorised deposit-taking institutions that are members of RITS.

‘Deposits of overseas institutions’ and ‘Governments and instrumentalities’ include the IMF and central banks.

‘Other liabilities’ include provisions, current year profit/loss, the counterpart obligation arising from transactions in repurchase agreements, and obligations arising from the outright purchase of securities which have been contracted but not yet settled.

Assets:

‘Gold and foreign exchange’ assets include foreign exchange holdings invested in government securities and bank deposits, market value of open forward foreign exchange contracts and IMF Special Drawing Rights. Securities sold but contracted for purchase under repurchase agreements are retained on the balance sheet in this category.

‘Clearing items’ include cheques and bills of other banks, bills receivable and remittances in transit. They may also include amounts owed to the Bank for overnight clearances of financial transactions.

‘Australian dollar securities’ include Commonwealth Government Securities (CGS) and securities issued by central borrowing authorities of state and territory governments. Securities sold but contracted for purchase under sell repurchase agreements are retained on the balance sheet in this category. Also included are Australian dollar securities purchased but contracted for sale under buy repurchase agreements, being: eligible bank bills, certificates of deposit and debt securities of ADIs; Australian dollar-denominated securities issued by certain foreign governments, foreign government agencies and by highly rated supranational organisations; and selected Australian dollar domestic residential and commercial mortgage-backed securities, asset-backed commercial paper and corporate securities.

‘Other assets’ include the Bank’s holdings of Australian notes and coins, Bank premises and other durable assets, and the Bank’s shareholding in the Bank for International Settlements.