Reserve Bank of Australia Annual Report – 1980 Appendix 1: Calendar of Official Actions

Announcement dates are used in most cases.

1979

30 June

The trade-weighted index of value of the Australian dollar was 83.1 (May 1970 = 100). Values of the index at the end of each month in 1979/80 are shown below:

7 August

A conversion loan for Commonwealth securities maturing on 15 August was announced. No cash loan was offered. Yields ranged from 9.90 per cent to 10.04 per cent.

21 August

The Commonwealth Government Budget for 1979/80 was presented. Estimates for the major aggregates were:

• outlays of $31.7 billion (9.1 per cent higher than in 1978/79);
• receipts of $29.5 billion (15.4 per cent higher than in 1978/79);
• an overall deficit of $2.2 billion and a domestic deficit of $0.9 billion ($3.5 billion and $2.3 billion, respectively, in 1978/79).

20 September

The Government made available a further $45 million (at an interest rate of 5 per cent) to the Primary Industry Bank of Australia (PIBA), bringing to $75 million the amount of Commonwealth funds lent to PIBA since its establishment in July 1978.

10 October

The Acting Treasurer gave consent under Section 63 of the Banking Act to The Bank of Adelaide entering into a Scheme of Arrangement for the merger of that bank with Australia and New Zealand Banking Group Limited.

26 October

The Treasurer announced that an institutional borrowing had been arranged in Japan for Y40 billion ($155 million) for a period of 20 years with an effective interest rate of 8.34 per cent.

31 October

From 1 November, Australian Savings Bonds Series 15 were on sale with an unchanged interest rate of 9.25 per cent.

8 November

Australia received the equivalent of 23.8 million Special Drawing Rights ($27.9 million) in foreign currency from the International Monetary Fund. The transaction, under the IMF's Buffer Stock Financing Facility, was in respect of sugar stocks constituted under the International Sugar Agreement.

22 November

The Government completed negotiations for its fourth yen public bond issue on the Tokyo market. The amount of the 12 year loan was Y30 billion ($107 million) and the yield was 8.27 per cent.

30 November

Effective 6 December, the Bank raised the SRD ratio of the major trading banks from 5.5 per cent to 6.0 per cent. The SRD action supported requests by the Bank to the major trading banks to moderate the rate of increase in their lending, which had been very high. The change in the SRD ratio was not an alteration of monetary policy; rather it was aimed at maintaining existing policy in changing circumstances.

9 December

The Treasurer announced that arrangements whereby Treasury notes were continuously on sale at pre-determined prices would be replaced by a tender system. Notes ceased to be on continuous issue at close of business on 18 December and the first tender was held on 19 December. Holders of Commonwealth securities maturing on 15 December were invited to redeem their holdings.

17 December

Australia repurchased gold from the International Monetary Fund comprising its entitlement in the fourth and final instalment in the Fund's programme of gold restitution to members. The repurchase increased the Bank's gold holdings by approximately $51 million (at November 1979 market value).

31 December

The Bank for International Settlements placed US$100 million with the Reserve Bank.

1980

1 January

Australia received 82.16 million Special Drawing Rights ($97.9 million) from the International Monetary Fund, in the second of a series of three allocations which the Fund is making over the period 1979–81 to members participating in its SDR Department. Australia also repaid 61.7 million SDR's ($73.5 million) stemming from the 1976 drawing on the IMF's Compensatory Financing Facility.

16 January

Effective 17 January, the Loan Council increased the maximum interest rates for borrowings by local and semi-government authorities by 0.4 per cent. The new maximum interest rate on public loans with currency of 4–9 years was 10.8 per cent.

5 February

The Treasurer announced that holders of Commonwealth securities maturing on 15 February would be invited to redeem their holdings.

14 February

The Government completed negotiations for a public bond issue of DM250 million ($130 million) on the German capital market. The loan was for a term of 10 years and carries a coupon rate of 8.125 per cent.

The Government endorsed a private industry-based scheme for the insurance of deposits with permanent building societies.

21 February

The Government completed negotiations for a private placement borrowing of DM150 million ($78 million) on the German capital market. The loan was for a term of seven years and nine months and carries a coupon rate of 8.0 per cent.

2 March

Effective 3 March, the Loan Council increased the maximum interest rates for borrowings by local and semi-government authorities by 0.8 per cent. The new maximum interest rate on public loans with currency of 4–9 years was 11.6 per cent.

From 3 March, Australian Savings Bonds Series 16 were on sale with an increased interest rate of 9.75 per cent.

31 March

The Treasurer announced relaxation in the policy governing portfolio investment overseas by Australian residents. Effective 1 April, limits were increased for overseas equity and real estate investment, and the range of eligible investments was widened to include certain marketable fixed interest securities.

1 April

The Treasurer announced that the Government had been approached with a proposal to establish a new bank in Australia.

13 April

Arrangements were announced for the tap system for the marketing of Treasury bonds.

29 April

Details were announced of the initial tap stocks, on issue from 30 April. Tap stock No. 1 (April 1982) carried a coupon rate of 11.5 per cent and was initially issued at par; tap stock No. 2 (April 1985) carried a coupon rate of 11.7 per cent and was initially issued at 99.5 per cent to yield approximately 11.84 per cent. The amounts offered were in the order of $500 million and $250 million respectively. Consistent with the yields offered on the initial tap stocks, and effective 30 April, the Loan Council increased the maximum interest rates for borrowings by local and semi-government authorities by 0.6 per cent. The new maximum interest rate on public loans with currency of 4–9 years was 12.2 per cent.

9 May

Tap stock No. 2 (April 1985) was withdrawn from issue, the indicated amount of subscriptions having been received.

19 May

Australia repaid the equivalent of 23.8 million Special Drawing Rights ($27.4 million) in foreign currency to the International Monetary Fund. The repayment was in respect of the November 1979 drawing under the IMF's Buffer Stock Financing Facility.

28 May

The Bank confirmed that banks had been told that on a case-by-case basis an increase could be considered in the proportion of banks' shareholdings in money market corporations; the Bank would not expect a bank's equity interest to exceed 60 per cent. Banks' equity interests in such corporations had, to that time, not exceeded 33⅓ per cent.

30 May

Tap stock No. 3 (May 1986) was announced, to be on issue from 2 June. The stock carried a coupon rate of 11.7 per cent and was initially issued at 99.65 per cent to yield approximately 11.79 per cent. The amount offered was in the order of $400 million.

1 June

The Treasurer announced 50 per cent indexation of the personal taxation scale from 1 July; and that, from 1 July, the rebate for a dependent spouse and some other rebates would be increased.

27 June

Effective 1 July, the Loan Council announced new marketing arrangements for semi-government securities. The existing maximum underwriting fees and brokerage on public and private loans would be replaced with graduated scales of maximum placement fees and the maximum period for which public loans are open will be reduced. Other timetabling changes and measures to improve the secondary market were also announced.

The Loan Council agreed to State Government programmes for 1980/81 of $1,307.25 million (an increase of 5.0 per cent on 1979/80) and to a borrowing programme for the States' larger authorities of $1,297.3 million (about the same as in 1979/80). The Loan Council also approved borrowings totalling $632.3 million in 1980/81 by State authorities under the infrastructure financing programme.

Tap stock No. 1 (April 1982) was withdrawn from issue, the indicated amount of subscriptions having been received.

30 June

The Bank repaid to the Bank for International Settlements US$100 million which had been placed with the Reserve Bank in December 1979.

Australia repaid the equivalent of 61.7 million Special Drawing Rights ($70.4 million) in foreign currency to the International Monetary Fund stemming from the 1976 drawing on the IMF's Compensatory Financing Facility.