Note 4 – Interest Income and Interest Expense | Reserve Bank of Australia Annual Report – 2019

Reserve Bank of Australia Annual Report – 2019 Financial Statements Note 4 – Interest Income and Interest Expense

Analysis for the year ended 30 June 2019

	Average balance $M	Interest $M	Average annual interest rate per cent
Interest income
Foreign currency investments	69,430	468	0.7
Australian dollar investments	92,713	1,830	2.0
Overnight settlements	503	6	1.2
Cash collateral provided	296	4	1.4
Gold loans	611	1	0.1
Loans, advances and other	45	1	1.6
	163,598	2,310	1.4
Interest expense
Exchange Settlement balances	28,274	413	1.5
Deposits from governments	29,258	519	1.8
Deposits from overseas institutions	1,828	22	1.2
Banknote holdings of banks	4,400	54	1.2
Foreign currency repurchase agreements	1,023	23	2.2
Australian dollar repurchase agreements	86	1	1.5
Cash collateral received	164	2	1.5
Other deposits	3	–	0.2
	65,036	1,034	1.6
Net interest income	98,562	1,276	1.3
Analysis for the year ended 30 June 2018
Interest income	167,961	2,101	1.3
Interest expense	76,004	1,200	1.6
Net interest income	91,957	901	1.0

Interest income for 2018/19 includes $1,646 million calculated using the effective interest method for financial assets not at fair value through profit or loss ($1,501 million in 2017/18). Interest expense for 2018/19 includes $1,034 million calculated using the effective interest method for financial liabilities not at fair value through profit or loss ($1,200 million in 2017/18).