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V H. 13 No. 11: H A L MARKET DEVELOPMENTS ABROAD I I . India I I I . Mine C h a r t s on F i n a n c i a l Markets Abroad E a r l y i n May t h e J a p a n e s e Government p l a c e d a 5 - 1 / 2 p e r c e n t , 17- y e a r bond f o r $ 2 7 . 5 m i l l i o n i n t h e U.S. market and i n J u n e t h r e e p r i v a t e i s s u e s t o t a l i n g $ 3 3 . 5 m i l l i o n were a l s o p l a c e d i n t h e U . S . T h i s b r i n g s t h e t o t a l volume of s e c u r i t y i s s u e s f o r t h e f i r s t h a l f of t h i s y e a r t o $129 m i l l i o n , o r w e l l above t h e $59 and $82 m i l l i o n volume i n t h e f i r s t and second h a l v e s of 1962, r e s p e c t i v e l y , (See T a b l e 1 ) , J a p a n e x p e c t s t o borrow a f u r t h e r $U7 m i l l i o n i n J u l y 0 I n a d d i t i o n , t h e r e was a $123 m i l l i o n i n c r e a s e i n U0S„ bank l o a n s t o J a p a n i n April. Table 1 . Japan: S h o r t - and Long-term Borrowings i n t h e U n i t e d S t a t e s ( i n m i l l i o n s of U.So d o l l a r s ) Change d u r i n g y e a r I960 1961 1962 I Bank l o a n s V Securities 2 / 1/ ?/ 3/ 30 512 722 58 780 . 205 iLl 316 2U9 23 272 "19^2 II III -20 36 16 Change d u r i n g q u a r t e r 1963 IV I Apr. -U7 55 8 23 11 2/ _27 . ^ _ 5 l 50 ' 62 123 y _17 11*0 S h o r t - t e r m l i a b i l i t i e s t o U.S. b a n k s c New s e c u r i t y f l o t a t i o n s . Preliminary. Money market c o n d i t i o n s i n Japan remained r e l a t i v e l y e a s y i n May and c a l l l o a n r a t e s e a s e d i n t h e second and t h i r d weeks of t h e month 0 The a v e r a g e i n t e r e s t r a t e f o r bank l o a n s and d i s c o u n t s d e c l i n e d f u r t h e r i n A p r i l . Money r a t e s a r e e x p e c t e d t o remain e a s y in J u l y s i n c e t h e Bank of Japan e a s e d i t s p e n a l t y d i s c o u n t r a t e s y s t e m on J u l y 1 . Stock p r i c e s r a l l i e d i n May and June but s t i l l remained below, t h e h i g h f o r t h e y e a r on A p r i l 5« S e a s o n a l l y a d j u s t e d t r a d e d e f i c i t c o n t i n u e d l a r g e i n May, but i n t e r n a t i o n a l r e s e r v e s c o n t i n u e d t h e i r modest upward t r e n d through J u n e c Net c a p i t a l r e c e i p t s have been s u b s t a n t i a l r e f l e c t i n g c o n t i n u e d heavy borrowing a b r o a d 0 The yen remained weak i n b o t h t h e s p o t and f o r w a r d exchange m a r k e t s i n May and t h e f i r s t h a l f of J u n e . Money m a r k e t . Money market c o n d i t i o n s remained r e l a t i v e l y e a s y i n May d e s p i t e a n e t c o n t r a c t i o n a r y impact from monetary developments 0 C a l l l o a n r a t e s e a s e d i n t h e second and t h i r d weeks of May, t h e n r o s e t o e a r l i e r l e v e l s i n t h e OFFICIAL USE ONLY ( D e c o n t r o l l e d a f t e r 6 months) - ' I OFFICIAL USE ONLY l a s t week. A n e t expansionary impact from a ¥91 b i l l i o n yen d e c l i n e i n bank n o t e s i n c i r c u l a t i o n was more t h a n o f f s e t by a d e c l i n e of ¥81 b i l l i o n i n Bank of Japan h o l d i n g s of government s e c u r i t i e s , n e t Treasury r e c e i p t s of ¥l*9 b i l l i o n and a d e c l i n e of ¥39 b i l l i o n i n Bank of Japan loans and d i s c o u n t s . I n t e r e s t r a t e s . C a l l loan r a t e s continued to r o n a i n r e l a t i v e l y easy i n May and t h e f i r s t h a l f of J u n e , but firmed s l i g h t l y i n t h e l a s t h a l f of J u n e . The u n c o n d i t i o n a l c a l l r a t e ( f o r loans repayable a t a d a y ' s n o t i c e ) remained a t 7 . 3 p e r cent between May 1 and June 19 except f o r an e a s i n g t o 6.935 p e r cent between May 7 and May 23. On June 20-21 t h e r a t e r o s e t c 7.665? per cent but dropped back t o 7 . 3 per cent on June 22. The average i n t e r e s t r a t e on bank l o a n s and d i s c o u n t s continued t o d e c l i n e through A p r i l . (See Table 2 below). Table P. Japan: Average Monthly I n t e r e s t Rates March — June September December 1/ * on Bank Loans and Discounts 1959 I960 1961 1962 1963 8.18 8.28 8.06 8.11 8.21 8.22 8.1k 8.08 7.92 7.88 8.00 8.20 8.22 8.23 8.2k 8.09 7.92 7.87 April The i n t e r e s t y i e l d on s h o r t - t e r m government s e c u r i t i e s was reduced from 6.02 t o 5.66 per cent e a r l y i n May by t h e M i n i s t r y of Finance. This s t e p was taken i n o r d e r t o avoid l e a v i n g t h e r a t e on t h e s e s e c u r i t i e s h i g h e r t h a n the Bank of J a p a n ' s b a s i c discount r a t e of 5.81; per c e n t . Bank-loans and d i s c o u n t s . Bank c r e d i t i n A p r i l r o s e only 0 , 9 p e r cent compared t o 1.6 per cent a y e a r e a r l i e r . This r e v e r s e s the t r e n d , erident s i n c e November"of l a s t y e a r , of a f a s t e r r a t e of c r e d i t expansion than a y e a r e a r l i e r . Loans and s e c u r i t y holdings of a l l banks i n A p r i l were up 0 . 7 and L.5 p e r c e n t , r e s p e c t i v e l y , but b i l l s discounted dropped 1 p e r c e n t . In A p r i l of 1962 s e c u r i t y holdings and b i l l s discounted r o s e 8.7 and 0 . 9 p e r c e n t , r e s p e c t i v e l y , with loans unchanged. E f f e c t i v e J u l y I , 1963, t h e Bank of Japan abolished the 0,365 per cent p e n a l t y discount r a t e charge on c r e d i t accommodation t o commercial banks borrowing between 80 and 100 p e r cent of t h e i r i n d i v i d u a l loan q u o t a s . A p e n a l t y r a t e of 3.65 per cent on borrowing in excess of 100 per cent of quota continues i n e f f e c t . The b a s i c discount r a t e of t h e Bank of Japan i s c u r r e n t l y 5.8h per c e n t . The a c t i o n was r e p o r t e d l y taken i n o r d e r t o encourage a c o n t i n u a t i o n of r e l a t i v e l y low c a l l loan r a t e s which t h e a u t h o r i t i e s hope w i l l make c u r r e n t y i e l d s on bonds more a t t r a c t i v e , to i n v e s t o r s . OFFICIAL USE ONLY OFFICIAL USE ONLY -3- E a r l i e r i n May t h e Bank of Japan announced t h a t i t would d i s c o n t i n u e t h e "window guidance" o f f e r e d t o c i t y banks during most of the p a s t t e n years* In . e f f e c t , t h i s p o l i c y c o n s t i t u t e d a form of c r e d i t rationing,, Heavier r e l i a n c e w i l l be p l a c e d on an expanded program of s e c u r i t y o p e r a t i o n s i n t r o d u c e d l a s t Novembero The p r o p o r t i o n of bank loans and d i s c o u n t s extended f o r purchases of equipment was 1 6 . 5 per cent i n A p r i l . This i s s u b s t a n t i a l l y below t h e 17oil per cent peak reached l a s t October* Bond m a r k e t . New i s s u e s of bonds t o t a l e d ¥123 b i l l i o n i n A p r i l down from the ¥138 b i l l i o n l e v e l i n March, b u t h i g h e r t h a n the ¥111: b i l l i o n monthly average i n January and F e b r u a r y . The d e c l i n e stemmed from a drop i n new i s s u e s of p u b l i c c o r p o r a t e debentures from ¥li5 b i l l i o n i n March t o ¥21 b i l l i o n i n A p r i l . Over t h e same p e r i o d new i s s u e s of bank debentures r o s e from ¥?U b i l l i o n t o ¥81 b i l l i o n and i n d u s t r i a l debentures from ¥19 b i l l i o n t o ¥21 b i l l i o n 0 Bond y i e l d s g e n e r a l l y remained unchanged i n A p r i l except f o r a s l i g h t r i s e i n y i e l d s on i n t e r e s t - b e a r i n g bank debentures and a d e c l i n e i n y i e l d s on i n d u s t r i a l bonds„ Stock market e Stock p r i c e s r o s e moderately during the f i r s t t e n days of May r e a c h i n g a l e v e l 2 p e r cent below t h e high f o r the y e a r on A p r i l 5o A f t e r easing through May 23, s t o c k s r a l l i e d a g a i n t o a peak on June l l i , 2 per c e n t below t h e May h i g h , and t h e n eased through June 2lu (See Table 3 below.) Table 3» Dow Jones Average of 225 Stocks, F i r s t Section of Tokyo Stock Exchange May k 10 17 2lt 31 ¥1,600 1,608 1,558 l,5Wi 1,555 June 7 Hi 21 28 ¥1,553 1,570 1962 High Low ¥1,590 1,216 1,552 1963 High Low ¥l,63lt ¥1,391 1,535 Foreign t r a d e 0 Exports and i m p o r t s , s e a s o n a l l y a d j u s t e d , f e l l 10 and 8 p e r c e n t , r e s p e c t i v e l y , i n Msy from t h e very high l e v e l i n A p r i l , b u t the d e f i c i t on t r a d e account continued t o remain l a r g e 0 (See Table L below,) The s e a s o n a l l y a d j u s t e d t r a d e d e f i c i t a t an annual r a t e was $ l . l i b i l l i o n i n May compared t o $216 m i l l i o n i n t h e t h i r d q u a r t e r o f l a s t y e a r and $56ii m i l l i o n i n t h e f o u r t h q i a r t e r 0 During t h e f i r s t f i v e months of t h i s y e a r , t h e d e f i c i t was $ 1 . 0 b i l l i o n a t a s e a s o n a l l y - a d j u s t e d annual r a t e c The s e a s o n a l l y - a d j u s t e d t r a d e f i g u r e s (monthly, or monthly average, on a customs b a s i s ) i n Table it a r e based on s e a s o n a l adjustment f a c t o r s computed by t h e Board of Governors of the F e d e r a l Reserve System. OFFICIAL USE ONLY OFFICIAL USE ONLY Table Uo Imports Exports Trade balance Japans I II 196 378 -118 S e a s o n a l l y Adjusted Foreign Trade ( i n m i l l i o n s of d o l l a r s ) ™" 1962 U72 L08 III w> U28 17 166 iO£ to =61; =18 4;7 \^8 I 183 1963 Jan„ Feb 0 Mar0 Apr. May to 1)16 1*83 to 512 U20 581 W 535 U22 -37 —?u -92 -112 -113 Exchange r e s e r v e s and c a p i t a l flows 0 Japanese i n t e r n a t i o n a l r e s e r v e s r o s e $16 m i l l i o n i n May and $8 m i l l i o n i n June t o $1*902 m i l l i o n » This b r i n g s t h e t o t a l gain s i n c e t h e f i r s t of the y e a r t o $61 m i l l i o n 0 The c u r r e n t account of t h e balance of payments, as measured on an exchange t r a n s a c t i o n s b a s i s , r e g i s t e r e d a d e f i c i t of $52 m i l l i o n i n May, c o n s i s t i n g of a d e f i c i t of # . 1 m i l l i o n on t r a d e account and $31 m i l l i o n f o r i n v i s i b l e s o With n e t long-term c a p i t a l r e c e i p t s of $9U m i l l i o n , n e t s h o r t - t e r m c a p i t a l payments of $31 m i l l i o n and net r e c e i p t s of $5 m i l l i o n under t h e e r r o r s and omissions i t e m / t h e o v e r a l l balance of payments r e g i s t e r e d a gain of $16 m i l l i o n . Since the f i r s t of t h e y e a r t h e c u r r e n t account has been i n d e f i c i t , b u t , except f o r February 5 net r e c e i p t s on c a p i t a l account have more t h a n o f f s e t t h e d e f i c i t « , Net long-term c a p i t a l r e c e i p t s were u s u a l l y high i n May, a t $91; m i l l i o n , compared t o a monthly average i n t h e J a n u a r y - A p r i l p e r i o d of $21 m i l l i o n » Japanese s h o r t - t e r m l i a b i l i t i e s t o UCS<, banks rose $123 m i l l i o n i n A p r i l , according t o p r e l i m i n a r y r e p o r t s * (See Table $ ) 0 The sharp r i s e i n March and A p r i l , t o t a l i n g $182 m i l l i o n , i n d i c a t e s a new upsurge in bank borrowing from the U0S0 following r e l a t i v e l y l i t t l e change on a month-to-month b a s i s s i n c e the s p r i n g of 1962o Table 5 o S h o r t - t e r m Claims by U0S0 Banks on Japan ( i n m i l l i o n s of U„So d o l l a r s ) 1959 i960 1961 1962 1963 Febo 168 362 875 1,601 1,693 175 372 952 1,685 1,685 Mar* Agr 0 May 20U 22L . 2L2 h20 250 L88 1,069 1,159 1,196 1,778 , 1,775 A,762 1,71^/ l,867f/ June 260 L97 1,272 1,758 II Jario 256 586 1,31a 1,765 269 628 1,335 1,767 Septo 262 660 1,28^ 1,711 Oct 0 Nov0 Deep 262 693 1,281 1,710 275 711 1,292 1,662 32U 806 1,528 1,733 NOTE 1 Data f o r 1962 have been r e c e n t l y revised^ a / Preliminaryo During t h e f i r s t h a l f of 1963 Japan f l o a t e d $129 m i l l i o n i n s e c u r i t y i s s u e s i n t h e United S t a t e s according t o a v a i l a b l e information» This compares with $59 m i l l i o n i n t h e f i r s t h a l f of l a s t y e a r and $82 m i l l i o n i n the second h a l f * As i n d i c a t e d below, Japan e x p e c t s t o f l o a t a f u r t h e r $li7 m i l l i o n i n J u l y 0 During May and J u n e , Japan p l a c e d t h e f o l l o w i n g i s s u e s i n t h e U6So markets OFFICIAL USE ONLY OFFICIAL USE ONLY Date May Borrower ( P r c o r P b a ) 2 / 1 June 13 June 19 June 28 Type and Terms Amount Gov1 to of Japan (Pb 0 ) $27=5 m i l . Nippon Express Co. (Pr Q ) M i t s u b i s h i E l e c t r i c Corp 0 (Pre) Dai Nippon P r i n t i n g Coc Ltd, (Pr=) $l5<>0 m i l 0 $13.5 mil* $ 5°0 mil 0 17=yToS 5-1/2%, sinking fund 1 5 - y r . , 6-1/2%, 15-yr0,6-1/2%, l5-yrc,6-3/8%, bonds CoD^Z C.D. C0D0 In J u l y 9 Japan e x p e c t s t o f l o a t t h e f o l l o w i n g i s s u e s ? H i t a c h i , Ltd. (Pb e ) Japan Fund s lnc 6 (Pb„) Nippon Telegraph and Telephone Public Corpo 1/ 2/ &20.0 $ 7«3 A.DoRo i s s u e . I s s u e of stock r i g h t s o $20=0 Bond i s s u e o Pr 0 - p l a c e d p r i v a t e l y 5 Pb 0 = p l a c e d p u b l i c l y 0 CoDc - C o n v e r t i b l e Debenture 0 Foreign exchange 0 The yen c o n t i n u e d t o remain weak i n both the spot and forward markets i n May and the f i r s t p a r t of June» From ¥36l o i*0 t o t h e d o l l a r e a r l y i n May, t h e middle = r a t e f o r t h e yen i n the spot market weakened t o ¥362.23 t o t h e d o l l a r during t h e l a s t h a l f of May and ¥362 0 25 t o t h e d o l l a r i n t h e f i r s t p a r t of June c The m i d d l e - r a t e i n t h e three-month forward market a l s o weakened, from ¥361.90 e a r l y i n May t o ¥362.l|0 during t h e f i r s t h a l f of June 0 Since t h e spot r a t e d e p r e c i a t e d more t h a n t h e f o r w a r d r a t e , t h e three-month forward discount f e l l from 0 . 5 5 p e r c e n t i n e a r l y May t o 0,17 p e r cent i n the f i r s t p a r t of June* In mid-June t h e discount widened s l i g h t l y as t h e spot r a t e f o r t h e yen s t r e n g t h e n e d and t h e forward r a t e remained unchangedo (See Table 6 below0) Table 60 Japans Customer's T„T. Exchange Rates of Bank of Tokyo i n Tokyo Y e n " d o l l a r Spot Middle Rate Three-month Forward Middle Rate A p r i l 26 361.55 361.90 May 2 10 17 2it 31 361.W 361.90 362.25 362.23 362.15 361.90 362.25 362.10 362.35 362.35 June 7 lit 362,25 362.20 3620U0 362=1*0 OFFICIAL USE ONLY Forward Discount' ( i n p e r cent p e r annum) .55 .39 .17 .13 0% .17 .22 OFFICIAL USE ONLY II, I n d i a ; 'Money a n d C a p i t a l Markets During May 1963 9y May t h e s e a s o n a l r i s e i n demand f o r c r e d i t came t o an e n d . T h i s e n a b l e d t h e s c h e d u l e d banks t o b u i l d up t h e i r cash b a l a n c e s and t o r e p u r c h a s e government s e c u r i t i e s I t a l s o c a u s e d a s i g n i f i c a n t d e c l i n e in t h e r a t e s f o r s h o r t - t e r m money 6 Gold p r i c e s r e c o v e r e d from t h e i r r e c o r d lows and t h e s t o c k market w i t n e s s e d . a sudden s p a t e of c a p i t a l i s s u e s , I n d i a ' s i n t e r n a t i o n a l monetary r e s e r v e s edged up s l i g h t l y . Money market> The r a t e f o r d a y - t o - d a y money c o n t i n u e d t o d e c l i n e i n May (See Table 17) ^Although t h e a v e r a g e d e c l i n e f o r t h e month was much l e s s t h a n t h a t f o r A p r i l g t h e c a l l money r a t e f e l l s h a r p l y in t h e l a s t h a l f of t h e month. The e a s i n g of d a y - t o - d a y money r a t e s i n d i c a t e s t h e c l o s e of t h e "busy s e a s o n / ' i e e C 5 t h e c o u n t r y ' s m a j o r c r o p s have been h a r v e s t e d and d i s t r i b u t e d so t h a t t h e economy's f i n a n c i a l r e q u i r e m e n t s a r e r e d u c e d . As n o t e d i n p r e v i o u s r e p o r t s s t h e c u r r e n t s h o r t - t e r m money r a t e s a r e s t i l l about 1 p e r c e n t h i g h e r than a y e a r e a r l i e r due t o t h e Reserve Bank of I n d i a ' s measures t o r a i s e i n t e r e s t r a t e s . Table 1» Indias ' I n t e r - b a n k C a l l Money Rate i n Bombay ( i n p e r c e n t p e r annum) Monthly a v e r a g e c> 1962 — Marc Aprc May 5,50 Ll9 3c 70 196] Mar. Apr. May 6.22 5.01a/ ii»78i/ S e l e c t e d d a t e s - 1963% Aoril 5 12 19 26 6,09 1.38 1,03 Average of F r i d a y s . May 3 10 17 2l 31 1I.1I3 5=22 5.15 lu95 3.87 Gold market„ P r i c e s i n t h e Bombay g o l d market f o r May were s i g n i f i c a n t l y /•-higher t h a n i n p r e v i o u s months e (See Table 2 C ) When t h e Gold C o n t r o l R u l e s were announced on J a n u a r y 9., t h e g o l d p r i c e was about $68o5>0 p e r ounce„ The p r i c e i n May exceeded t h a t l e v e l c even though one of t h e p u r p o s e s of t h e r e g u l a t i o n s was t o lower t h e p r i c e . At t h e end of June i t was r e p o r t e d t h a t new r e g u l a t i o n s have been i s s u e d which r e q u i r e g o l d r e f i n e r i e s and d e a l e r s t o c o n v e r t t h e i r e x i s t i n g g o l d s t o c k s i n t o gold of a p u r i t y not i n e x c e s s of lit c a r a t s , i n a d d i t i o n t o t h e e x i s t i n g p r e s c r i p t i o n a g a i n s t t h e p r o d u c t i o n of g o l d of a h i g h e r t h a n lii c a r a t p u r i t y c OFFICIAL 0SE ONLY =7- OFFICIAL USE ONLY Table 2C Indiag P r i c e of Gold Bullion in Bombay ( i n d o l l a r s per f i n e ounce) a / Monthly averages 1962 Mar, Apr. May 79=18 78.77 90.93 1963 Mar, Apr. May 65.6L 67.67b/ 7l4.79b/ Selected dates — 1963 s April Average spot q u o t a t i o n s 5 Average of Fridays „ !/ not quoted May 3 10 76.31 75.88 17 7iio08 2h 72.88 . 31 converted i n t o d o l l a r s at par value 0 5 61=53 12 68.75 19 69.73 20 not quoted Stock market. P r i c e s i n the Indian stock markets eased somewhat during May but on the average were s t i l l h i g h e r t h a n i n the previous month, (See Table 3) Stock p r i c e s a r e s t i l l about 15 per cent lower than a y e a r e a r l i e r „ On June 10, t h e ban on forward t r a d i n g in t h e Indian stock markets was l i f t e d , but purchases were made s u b j e c t t o increased margin requirements„ The ban had been i n e f f e c t since November 1962 s following t h e sharp decline i n share p r i c e s as a r e s u l t of the Chinese Communist a t t a c k . In May t h e r e was a l a r g e number of c a p i t a l i s s u e s by the p r i v a t e s e c t o r , following the almost t o t a l l a c k of issues since October 1962 e Since the stock market i s s t i l l weak, the new i s s u e s mainly r e p r e s e n t an attempt on t h e p a r t of companies who had postponed plans to f l o a t i s s u e s following the sharp decline in share p r i c e s in October t o r a i s e needed c a p i t a l before the summer months, which are g e n e r a l l y reserved f o r government borrowings 0 Unless they f l o a t e d i s s u e s now, they would have to wait u n t i l the f a l l . Table 3* I n d i a % P r i c e Index of Variable Dividend I n d u s t r i a l S e c u r i t i e s (1952-53 = 100) Monthly average: 1962 Mar. Apr, May 192.2 192.6 195.3 1963 Mar. Apr„ May I6U0I4 , 162.35/ 161u8a/ May U 11 18 25 166.lt 165.0 16U.0 163.6 Selected dates - 1963' April a/ 6 13 20 27 Average of Saturdays 0 159.9 159.9 163.0 166,3 OFFICIAL USE ONLY OFFICIAL USE ONLY -8- Banking development s P Bank c r e d i t d e c l i n e d s h a r p l y i n May as t h e "busy™ season f o r f i n a n c i n g the d i s t r i b u t i o n of t h e major crops came t o an endo (See Table L) As a percentage of t o t a l d e p o s i t s 9 bank c r e d i t d e c l i n e d from 7 6 . 2 1 i n A p r i l t o IkoOQ i n May. Bank d e p o s i t s continued t o i n c r e a s e i n May, although a t a lower r a t e t h a n i n A p r i l , and t h e r e were continued i n c r e a s e s i n scheduled banks' investments i n government s e c u r i t i e s and i n t h e i r cash and b a l a n c e s with t h e Reserve Bank. Table lu Monthly Changes in Deposits and P r i n c i p a l Assets of Scheduled Banks ( i n m i l l i o n s of r u p e e s ) MAIN ASSETS Per Cent Bank Per Cent Gov f t Per Cent Cash & Balances Per Cent Change D e p o s i t s Change Credit Change S e c u r i t i e s Change w/Reserve Bank 1962 May India: +202 +lo0 +106 +I4.89 +10U +0.5 1 OoO —l68 -2.8 +75 +5.7 +515 +3oL +0*1 -2.3 -189 +215 +13U -3.1 +3=6 +2.2 +1u +22 +18 -0.3 +1.8 +lolt + 1963 1 March April May +2.I1 +0o5 + 16 -367 Exchange r e s e r v e s 0 I n d i a * s i n t e r n a t i o n a l r e s e r v e s r o s e by $7 m i l l i o n i n May t o a l e v e l of $U9U m i l l i o n 0 (See Table 5)o Taking i n t o account the $25 m i l l i o n drawing from t h e $100 m i l l i o n stand-by arrangement with t h e IMF i n J u l y 1962 s I n d i a ' s r e s e r v e s a r e $6 m i l l i o n h i g h e r t h a n a y e a r e a r l i e r © Table 5o India: I n t e r n a t i o n a l Monetary Reserves of t h e Reserve Bank ( i n m i l l i o n s of d o l l a r s — l a s t F r i d a y of month) Months 1962 Mar 0 Apr* May 520 L83 lj.63 1963 Mar0 Apr* May U92 1*87 h9h May hQh Wh h97 U98 U9U S e l e c t e d d a t e s - 1963? April 5 12 19 26 189 187 h87 US7 3 10 17 2h 31 A s i a , A f r i c a and L a t i n America S e c t i o n 0 OFFICIAL USE ONLY 1 CANADA rw\ ! R A JE DIFFERENTIA AND FORWARD C A N L O I L ^ J M R SP«AD IN FAVOR OF CANADA : ' T r f r r ^ ^ * t T 'NCfHUVt IN FAVOR OF CANADA I960 962 INTEREST ARBITRAGE, NEW YORK/LONDON Friday figures Per cent per am 3 - M O N T H T R E A S U R Y BILL RATES \ I lONDON RATE D I F F E R E N T I A L A N D 3-MONTH F O R W A R D STERLING --K— —I ] r 1 1 i " [ - I 1 I RATE D I F F E R E N T I A L W I T H F O R W A R D E X C H A N G E C O V E R r INTEREST A R B I T R A G E FOR G E R M A N COMMERCIAL BANKS Friday figures 3 - M O N T H T R E A S U R Y B I L L S , I N T E R B A N K L E N D I N G RATE A N D -EURO-DOLLAR D E P O S I T RATES GERMAN INTERBANK RATE D I F F E R E N T I A L A N D F O R W A R D D E U T S C H E M A R K DISCOUNT ( —) ! / - " V r V ~ N \ / ~ / " V ~ T V X " ' RATE D I F F E R E N T I A L W I T H F O R W A R D E X C H A N G E C O V E R — NET INCENTIVE: 1961 — ,N FAV0R OF FRANKFURT ( + ) 1962 * N o I e: Special forward rale available I o German commercial banh 7~ ~ 1963 INTEREST A R B I T R A G E , FRANKFURT / LONDON Friday figures 3 — M O N T H T R E A S U R Y BILLS A N D I N T E R B A N K L E N D I N G RATES Per cent per annum^ RATE D I F F E R E N T I A L A N D 3 — M O N T H F O R W A R D S T E R L I N G /*V \ \ G E R M A N TREASURY BILLS n | — p , ~ , — GERMAN INTERBANK LOAN RATE V J__LJ RATE D I F F E R E N T I A L W I T H F O R W A R D E X C H A N G E C O V E R V— _L 1 SHORT-TERM INTEREST RATES * _1 I V V \ I I J R T ^ _ ± I U R 0 - D 0 U A 8 - LOHDOH-V^—1 — *X" 3 month treasury bill rates I or all countries except Jfipan (3 month interbank deposM rate) and Switzerland (] month deposit rote) ~j~ 3- mont h rote lor U 5 dollar deposits m London L O N G - T E R M B O N D YIELDS \-/ 1959 1960 1961 1962 1963 JNPUSTJ*IAL .,9_se_ = joo STOCK JNDICES^ Ratio scale GERMANY \ U.S^ S P O T E X C H A N G E RATES - M A J O R CURRENCIES A G A I N S T U.S. DOLLAR PER TEN, Above par Above p o i \~v j F M A M J J A S 0 19 61 N D J f M A M J J 19 62 A S 0 N D J F M A M J J 19 63 A S 0 H D 3-MONTH FORWARD EXCHANGE RATE Ffidoy ( i g u m AGAINST U. S. DOLLARS i • PKMILIN 4- - < r J ^ s - - — Y POUND STi RUNG r - - • DISCOUNT 1 ! .1 AGAINST 1 I i f POUND i i i STERLING i , , 1 ,, - LONDON : ^ y v = < V w i s $ '»«< 0. $. DOLLAR AGAINST FOUND STERLING - LONDON ~7 - . i T i i i i i i i i
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