The target balance in the RBRF is not a minimum level of capital that needs to be maintained at all times but rather a benchmark for the Board to consider when providing advice to the Treasurer regarding the Bank’s capital and dividends.
The Reserve Bank Act sets out how these reserves are utilised when the Bank makes a profit or a loss: • Unrealised gains are not available for distribution and are transferred to the UPR. • Unrealised losses are first absorbed by the UPR. In the event unrealised losses exceed the balance of the UPR, they are offset against other sources of income.