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Wednesday, 19 April 1961

Mr HAROLD HOLT - The Governor of the Reserve Bank has made it clear that this release does not involve any change of credit policy. He has pointed out that whereas in the first quarter of the year it is normal for advances to fall because of seasonal factors, in the second quarter it is normal for advances to increase, as income tax payments have to be made and liquidity tightens generally in the banking system. The bank, in order to sustain the liquidity of the banks, has found it desirable to make these releases from the statutory reserve deposits: The Governor has taken the opportunity to stress again what has already been stated in connexion with earlier releases by the bank, and also in directives issued by him, to the trading banks concerning policies they are to apply. He has said again that preferential treatment is to be given to exporters, particularly those in the- rural and mining industries.

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