I am informed by the Central Bank that the level of its accounting reserves at the end of September stood at 1,450 million. As with any balance sheet, the Central Bank's total assets have a counterpart in liabilities. The liabilities side includes deposits, by credit institutions and government, legal tender notes and the bank's capital. It also contains a revaluation account, which acts in part as a buffer against exchange rate movements and the bank's accounting reserves. The latter consist of the superannuation, currency and general reserves and have been accumulated by the bank over the years from income earned from its operations.
These accounting reserves must be distinguished from the so-called official external reserves. The latter represent the bank's external holdings, principally of deposits or instruments denominated in foreign currency and amount to over 6 billion. It must be remembered that the bank also has considerable liabilities that must be set against these assets, and the external reserves are not, therefore, free assets which could be liquidated and handed over for some other purpose. The suggestion sometimes made, therefore, that this 6 billion can somehow be regarded as unencumbered, and available for other purposes, is therefore unfounded.