Nowadays the Reserve Bank of New Zealand is projecting a much smaller overplus in 2009. Analytics say it happens mostly because of a decrease in net investment income.
Today Reserve Bank governor Alan Bollard has made a release reporting that the central bank's annual return, in which the central bank reported an operating overplus of $535 million in the year to June 30, from which a dividend of $168 million has been paid to the Crown. The current statistics clearly shows that the dividend is down from $193 million in 2007.
Dr Bollard pointed out that the central bank was in a good stage and condition to have a deal with the current macro-economic and financial stresses.
The annual return shows the central bank budgets for the operating overplus to decrease to $259 million in 2009 as net investment profit reduces from $573 million in 2008 to $303 million in 2009.
The central bank spent 22 millions dollars on staff in 2008. It has 70 staff earning more than $100,000 - and this will enhance to 25 millions dollars in 2009 as it has been given inadvertence of financial institutions as well as banks. Above this the annual return shows the bank has foreign reserves intrusion capacity of $10.5 billion, up from $6 billion.
Last year in June 2007 the bank interfered with the foreign exchange market for the first time since the time when the New Zealand dollar was floated in 1985. The capital bank has gradually enhanced it open foreign exchange position during the whole year from $0.7 billion as at June 30, 2007 to $4.4 billion as at June 30, 2008.
Furthermore the capital bank admonished that its reported net income will be more instable in the future because of its open foreign exchange position.
"Today we can say that we have a new foreign exchange policy that's helpful to smooth all the peaks and troughs in the exchange rate. To add, we have heightened a planned open foreign exchange position to provide us with more leverage in case of strong unsteadiness in the markets."
In 2008 the bank invested $9.1 million on monetary policy formation.
Dr Bollard outlined that the capital bank is going on developing its macro-economic analysis tools and instruments, which currently consist of a suite of data-driven forecasting models, and an innovative central forecasting and policy model. So far it has done considerable and useful work on the effects and running of a slowing economy. According to statistics in 2008 gross mark-to-market gains on the central bank's open foreign exchange position were 344 million dollars.