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Thursday, 9 March 1961

Mr HAROLD HOLT - I do not believe that the Deputy Leader of the Opposition has completely covered the statement made by the Prime Minister at that time. What the Prime Minister intended to convey, and what we have always stressed, is that the point that is reached with reserves is not as important as the trend in the reserves. What becomes significant, then, is the effect of measures taken to remedy the movement in overseas reserves. Reserves, of course, are intended to cushion the effects of fluctuations in one's international trade situation and they have been used in that way in recent times. The honorable gentleman is well aware that this Government has taken firm measures of a significant kind in order to redress the downward trend in our balance of payments. The Acting Prime Minister announced last night a series of important proposals directed to improving the export income of the country. The other change since the period mentioned by the honorable gentle man should not pass without comment. It concerns our second line of reserves. As he will be aware, the Australian quota with the International Monetary Fund has been doubled since the time of which he speaks.

Mr Whitlam - Do you propose to borrow from the fund?

Mr HAROLD HOLT - The Deputy Leader of the Opposition refers to that as " borrowing ". Portion of our drawing rights, of course, consists of payments we have made into the fund ourselves. These have in turn had the effect, nominally, of reducing our overseas reserves in the front line but strengthening our drawing rights in the second line.

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