Reserve Bank of Australia Annual Report – 2021 Financial Statements Note 4 – Interest Income and Interest Expense

Analysis for the year ended 30 June 2021

  Average balance
$M
Interest
$M
Average annual
interest rate
Per cent
Interest income
Foreign currency investments 54,220 138 0.3
Australian dollar investments 280,805 4,293 1.5
Overnight settlements 503 0 0.0
Cash collateral provided 86 0 0.1
Gold loans 826 1 0.1
Gold borrowed under gold swaps
Loans, advances and other 32 0 0.6
  336,472 4,432 1.3
Interest expense
Exchange Settlement balances 139,878 40 0.0
Deposits from governments 74,308 107 0.1
Deposits from overseas institutions 5,401 0 0.0
Banknote holdings of banks 3,873 1 0.0
Foreign currency repurchase agreements 556 0 0.0
Australian dollar repurchase agreements 180 0 (0.1)
Gold loaned under gold swaps 623 (1) (0.1)
Cash collateral received 172 0 0.0
  224,991 147 0.1
Net interest margin     1.3
Analysis for the year ended 30 June 2020
Interest income 190,279 1,944 1.0
Interest expense 84,610 446 0.5
Net interest margin     0.8

Interest income for 2020/21 includes $276 million calculated using the effective interest method for financial assets not at fair value through profit or loss ($736 million in 2019/20). Interest expense for 2020/21 includes $147 million calculated using the effective interest method for financial liabilities not at fair value through profit or loss ($446 million in 2019/20).