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Wednesday, 30 November 1960

Mr WHITLAM (WERRIWA, NEW SOUTH WALES) - The Treasurer will be aware that despite the restrictive advance policy which he has ordained, the Governor of the Reserve Bank of Australia has announced that the statutory reserve deposit ratio will be reduced temporarily to meet the usual pre-Christmas withdrawal of cash by the public. As this action appears inconsistent with general credit policy and as trading banks, of their own initiative, should make provision for Christmas withdrawals of cash, I ask him whether the reduction in the statutory reserve deposit ratio is designed to avoid further trading banks, in particular the largest private trading bank in Australia, suffering the embarrassment of having to borrow from the Reserve Bank. If this is not the reason for the reduced reserve ratio, what is the reason for the unusual action taken by the Reserve Bank?

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