Reserve Bank of Australia Annual Report – 1982 Calendar of Official Actions
(Announcement dates during 1981/82 are used in most cases)
30 June
The trade-weighted index of the value of the Australian dollar was 92.9 (May 1970 = 100). Values of the index at the end of each month in 1981/82 are shown below.
| July | 94.2 | January | 90.1 |
|---|---|---|---|
| August | 94.4 | February | 89.2 |
| September | 93.8 | March | 88.8 |
| October | 93.0 | April | 88.2 |
| November | 91.2 | May | 88.0 |
| December | 90.5 | June | 88.2 |
1 July
Three tap stocks of Commonwealth Treasury bonds were on offer. Eight tap stocks were introduced and nine were withdrawn during 1981/82. Some details are provided below.
| Date of Introduction |
Tap Stock Number |
Date of Maturity |
Initial Yield (% p.a.) |
Date Withdrawn |
|---|---|---|---|---|
| 9 Mar 81 | 12 | July 84 | 13.10 | 9 July 81 |
| 11 May 81 | 13 | April 83 | 13.10 | 25 Sept 81 |
| 10 June 81 | 14 | May 88 | 13.10 | 6 Nov 81 |
| 10 July 81 | 15 | June 84 | 13.60 | 23 Oct 81 |
| 28 Sept 81 | 16 | June 83 | 14.50 | 23 Oct 81 |
| 28 Oct 81 | 17 | April 84 | 14.65 | 5 Apr 82 |
| 28 Oct 81 | 18 | June 85 | 14.93 | 13 Nov 81* |
| 9 Nov 81 | 19 | April 88 | 15.00 | 5 Apr 82 |
| 19 Nov 81 | 20 | Nov 85 | 14.93 | 7 May 82 |
| 17 May 82 | 21 | Feb 84 | 16.40 | 16 July 82* |
| 17 May 82 | 22 | Aug 85 | 16.40 | 16 July 82* |
| * Tap Stock No. 18 and Tap Stocks No. 21 and 22 were kept open for holders of Treasury bonds maturing 15 November and 15 July, respectively, who wished to reinvest the proceeds into these stocks. | ||||
During the year four adjustments of significance were made to yields of Treasury bonds on offer. Yields were increased by 0.4 to 0.8 percentage points on 6 July, by 1.0 to 1.2 percentage points on 14 August and by 0.07 to 0.20 percentage points on 3 February. On 1 June the yield of Tap Stock No. 21 was reduced by 0.1 percentage points. The minimum allowable subscription was reduced from $5,000 to $1,000 with the introduction of Tap Stocks No. 21 and No. 22.
15 July
The Treasurer announced that negotiations for a Commonwealth borrowing overseas had been completed. This and subsequent overseas loan raisings are summarised on the next page. The dates are those of announcements that negotiations were completed and the amounts are net proceeds subsequently received.
| $A million | ||
|---|---|---|
| 15 July | Yen | 55 |
| 19 November | Swiss francs | 192 |
| 1 December | Swiss francs | 46 |
| 11 December | Deutschemarks | 114 |
| 10 February | Deutschemarks | 76 |
| 10 March | Swiss francs | 296 |
| 19 March | Swiss francs | 47 |
| 19 May | Yen | 77 |
19 July
The Treasurer announced the removal, effective 20 July, of limits on amounts that Australian residents may invest overseas in equities and real estate. Limits for investment overseas in fixed interest securities were not changed.
23 July
The Bank provided the International Monetary Fund with a line of credit for the equivalent of SDR50 million (approximately $A50 million) for two years. The Fund in 1981 engaged in a borrowing programme to finance its policy of standing ready to provide expanded assistance to countries with large balance of payments deficits.
11 August
The minimum issue term for trading bank certificates of deposit was reduced from three months to thirty days.
14 August
The Bank increased interest rate ceilings applying to certain advances of trading and savings banks by 1 percentage point, effective 17 August. The following changes were made.
- The maximum interest rate which trading banks may charge on overdrafts with limits of less than $100,000 was increased from 12.5 per cent per annum to 13.5 per cent per annum. Comparable increases were applied to interest rates on term and farm development loans of less than $100,000.
- The maximum interest rate on personal instalment loans, which was 8.75 per cent (flat), was raised to 9.25 per cent (flat).
- The maximum rate of interest which savings banks may charge on loans of less than $100,000 was increased by 1 percentage point, bringing maximum rates for loans for owner-occupied housing to 12.5 per cent per annum and for other loans to 13.5 per cent per annum. Trading banks indicated their intention to continue to charge the same rates on their similar loans for owner-occupied housing as those by savings banks.
Within these ceilings each bank would determine the rates to be applied to its loans. The banks continued the understanding established in December 1980 that increases in interest rates would not apply to borrowers affected by drought in drought-declared areas for the duration of the drought.
18 August
The Commonwealth Government's budget for 1981/82 was presented. Estimates of the major aggregates were:
- outlays of $40,862 million (12.6 per cent higher than in 1980/81);
- receipts of $40,716 million (15.8 per cent higher than in 1980/81); and
- a total deficit of $146 million with a domestic surplus of $1,542 million (in 1980/81 there was a total deficit of $1,127 million and a domestic surplus of $429 million).
15 September
The Bank announced that it had requested each major trading bank to limit to 12 per cent per annum the rate of growth in its total advances outstanding from a base level. The base level was a figure for June 1981 for each bank which was 12.6 per cent higher than its June 1980 level of advances outstanding. A previous request that banks exercise comparable restraint in the other means by which they facilitate or provide finance was not continued, but banks were asked to bear in mind the need for overall moderation in financing. The Bank stated that this change in guidance was not a relaxation of monetary policy, which continued to be to restrain the growth of the availability of money and credit. Against a background indicating reduced growth of the liquidity base for the financial sector generally in 1981/82 compared to 1980/81, the Bank saw rather less need for quantitative restraint of bank lending.
21 October
It was announced that the rate of interest applying to the Income Equalization Deposit Scheme for primary producers would be increased from 7 per cent per annum to 9.5 per cent per annum.
30 October
Official reserve assets were increased by a placement with the Bank of US$200 million (approximately $A176 million) by the Bank for International Settlements.
6 November
Australian Savings Bonds, Series 19, was withdrawn and replaced on 9 November by Series 20. Investors in Series 20 and also those in subsequent series will be permitted to reinvest into a later series of Australian Savings Bonds without giving, as was required of investors in previous series, one month's notice of their intention to do so. In addition the maximum permitted holding by an individual of Australian Savings Bonds and Special Bonds, all series combined, was increased from $150,000 to $200,000. One further series of Australian Savings Bonds was introduced during 1981/82. Some details are provided below.
| Date of Introduction |
ASB Series Number |
Date of Maturity |
Interest Rate (% p.a.) |
Date Withdrawn |
|---|---|---|---|---|
| 24 Mar 81 | 19 | 1 Dec 88 | 12.25 | 6 Nov 81 |
| 9 Nov 81 | 20 | 1 May 89 | 12.25 | 30 Mar 82 |
| 31 Mar 82 | 21 | 1 Oct 89 | 13.25 | 2 July 82 |
17 November
The Final Report of the Committee of Inquiry into the Australian Financial System was tabled in Federal Parliament.
2 February
Australia converted its reserve position with the International Monetary Fund into foreign currency. The amount involved was equivalent to about $260 million.
19 February
The Loan Council decided to hold inquiries into:
- the role of the Loan Council and the manner in which it fulfils that role; and
- detailed arrangements for the issue and sale of Commonwealth Treasury bonds by tender and related arrangements for the marketing of semi-government securities.
28 February
The Treasurer announced that the Loan Council had decided that the $348 million not yet borrowed of the 1981/82 infrastructure borrowing programme of the States' larger authorities could be obtained by borrowing overseas.
18 March
The Bank increased interest rate ceilings applying to certain advances of trading and savings banks by 1 percentage point, effective 19 March. At the same time, restrictions on deposit facilities offered by trading and savings banks were eased. These changes which are listed below were made in conjunction with a package of housing policies announced by the Treasurer.
- All those interest rate ceilings on bank advances which were increased on 17 August 1981 (see previous entry in Calendar), except for that on personal instalment loans, were increased by 1 percentage point. The maximum interest rate chargeable on personal instalment loans rose by 0.5 per cent to 9.75 per cent (flat).
- The minimum period for which trading banks may offer fixed deposits and certificates of deposit was reduced from 30 days to 14 days for amounts of $50,000 and over, and from 3 months to 30 days for fixed deposits of lesser amounts.
- Savings banks were authorised to offer fixed deposits of less than $50,000 for terms of 30 days to 4 years and were informed they need no longer require a minimum period of one month's notice of withdrawal on their savings investment accounts.
30 April
The Bank repaid US$200 million placed with it by the Bank for International Settlements on 30 October 1981.
3 May
More flexible arrangements were introduced for the provision of last resort loans to authorised dealers in the short-term money market. Loans are now repayable between 7 and 10 days (previously 7 and 30 days). In addition, where conditions warrant, the Bank may offer loans of less than 7 days.
12 May
The Bank increased the interest rate paid on Statutory Reserve Deposits maintained with it by trading banks from 2.5 per cent per annum to 5.0 per cent per annum.
16 June
The Bank announced some changes, effective 1 July, in its arrangements with authorised dealers in the short-term money market. Dealers were allowed more flexibility in the composition of the non-Commonwealth Government component of their portfolios. Also, the range of securities accepted by the Bank as collateral for last resort loans to dealers was reduced to comprise, in normal circumstances, only Commonwealth Government securities within five years of maturity. Previously, some securities of major public authorities were also accepted as collateral for last resort loans.
24 June
The Loan Council made the following decisions.
- The tap system of selling Commonwealth Treasury bonds was to be replaced, as soon as practicable, with a tender system. Under the new system the Treasurer would have the power to decide the timing of each tender and the maturities, coupons and quantities of stock to be offered, as well as the power to allot up to the full amount offered at each tender, at yields bid in the tender.
- The power to determine the terms and conditions of Australian Savings Bonds was delegated to the Treasurer.
- Major electricity authorities were freed, in respect of their domestic borrowings, from Loan Council controls. The size and terms of overseas borrowings by these authorities and all borrowings of other larger state authorities remained subject to Loan Council approval.
- The total borrowing programme for 1982/83 for all State governments was set at $1,438 million (an increase of 10.0 per cent on 1981/82) and for the States' larger authorities, excluding major electricity authorities, at $1,046 million (an increase of 13.6 per cent on 1981/82).
29 June
The Bank withdrew its request to trading banks to keep growth in their advances to not more than 12 per cent per annum. The change took effect from the end of June. The Bank stated that this was an adjustment in the technique of monetary management and not a shift in monetary policy itself; policy still required restraint in the provision of finance by banks and other intermediaries.