Australia Yearbook - 2001

904 Year Book Australia 2001
Money supply measures
The money supply, as measured and published
by the Reserve Bank, refers to the amount of cash
held by the public plus deposits with specified
financial institutions. The measures range from
the narrowest category, money base, through to
the widest category, broad money, with other
measures in between. The measures mainly used
are as follows.
26.33 VALUE OF AUSTRALIAN NOTES ON ISSUE
Last Wednesday in June
1998 1999 2000
$m $m $m
$1 19 — —
$2 47 46 46
$5 361 379 397
$10 617 639 646
$20 1 804 1 850 1 917
$50 9 523 10 356 11 188
$100 9 280 10 282 11 240
Total 21 651 23 552 25 434
% % %
Increase 7.9 8.8 8.0
Source: Reserve Bank of Australia.
26.34 VALUE OF AUSTRALIAN DECIMAL COIN
ON ISSUE
Last Wednesday in June
1998 1999 2000
$m $m $m
1c 23 22 22
2c 30 30 29
5c 112 117 123
10c 102 107 114
20c 148 154 162
50c 215 224 234
$1 365 381 396
$2 518 552 589
Total 1 511 1 588 1 669
% % %
Increase 3.8 5.1 5.0
Source: Reserve Bank of Australia.
Money base, which comprises holdings of
notes and coin by the private sector, deposits
of banks with the Reserve Bank, and other
Reserve Bank liabilities to the private sector.
M3, which is defined as currency plus bank
deposits of the private non-bank sector.
Broad money, which is defined as M3 plus
borrowings from the private sector by
non-bank financial intermediaries (including
cash management trusts) less their holdings of
currency and bank deposits.
The money supply under each of these measures
at end June of the last three years is shown in
table 26.35.
26.35 MONEY SUPPLY MEASURES
June
1998
June
1999
June
2000
$m $m $m
Money base 31 424 31 752 28 083
M3 340 891 375 835 406 500
Broad money 405 770 451 524 479 716
% % %
Percentage
change(a) 5.9 11.3 6.2
(a) Of broad money, over level at end of preceding June.
Source: Reserve Bank of Australia.
Payments system
Following recommendations by the Financial
System (Wallis) Inquiry, the Payments System
Board was established within the Reserve Bank
on 1 July 1998. The Payments System Board has
responsibility for determining the Reserve Bank’s
payments system policy, under the powers set
out in the Payments Systems (Regulation) Act
1998. The payments system has components for
settling large amounts, and components for
settling retail amounts.
The High Value Clearing System (HVCS) was
implemented in August 1997. The HVCS allows all
holders of Reserve Bank exchange settlement
accounts to settle large value payments through a
system designed to process a high volume of
transactions. On 1 March 1999 the Payments
System Board announced easing of restrictions
on eligibility for holding exchange settlement
accounts. APRA-supervised institutions and some
institutions not supervised by APRA potentially
now have access.
Initially, the settlement of payments was on a net
deferred basis, where settlement of interbank
obligations was not completed until 9 a.m. on the
day following the sending of payment
instructions. This was changed to a real-time
gross settlement (RTGS) basis on 22 June 1998.
This new settlement basis, where payments are
settled immediately, contributes substantially to
the reduction of settlement risk and systemic risk
in the Australian payments system.