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L'înformâtion et les sèrvices publyis pouor I'Île dé Jèrri

Currency Fund: Withdrawal to Consolidated Fund

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A decision made 20 December 2024:

Decision Reference:  MD-TR-2024-1,019

Public

Subject: Approval of the  financial return of the Currency Fund

 

Report Title: WR - Approval of the financial return of the Currency Fund

Public

Decision(s):

The Minister approved the withdrawal of £6.3 million from the Currency Fund, being satisfied that there remains sufficient assets in the fund after making provision for the repayment of currency in issue. The withdrawal will form the 2024 financial return to the Consolidated Fund.

Reason for Decision(s):

Under Article 7A (3)(b) of the Currency Notes and Currency Fund (Jersey) Law 1959, the Minister for Treasury and Resources is empowered to transfer all or any part of a surplus in the Currency Fund as determined by the Minister after making provision for the repayment of currency in issue.  Retention of a buffer of £9.9 million is proposed to ensure sufficient assets are retained in the Fund to ensure repayment of the currency can be met on demand. Valuation of the buffer is based on projections run by Aon, the States Investment Advisor, and reviewed by the Treasury Advisory Panel in setting the Fund Investment Strategy. These projections included modelling of the maximum losses for the portfolio with a 99 per cent confidence rate. Given the conservative nature of the portfolio and the objective of ensuring that the value of Jersey currency must be fully backed, the buffer retained is materially in excess of the projected maximum loss value to ensure in the event of a major market correction, risk assets can continue to be held to recovery.   The Minister, having taken advice from Officers of the Treasury and Exchequer Department, is satisfied that following a withdrawal from the Fund of £6.3 million, the value of £9.9m million of assets in excess of the liability for currency in circulation, is sufficient to provide for the repayment of currency in issue.   After the drawdown, the Currency Fund will hold £107 million of assets and have an offsetting liability for currency in circulation estimated at £97.1 million. Netted together, the net asset value of the Fund will therefore be £9.9 million.

Resource Implications: There are no manpower implications. There are no costs associated with the transfer as the cash is readily available. The above decision will be actioned by the existing staff in Treasury and Investment Management.

 

Action Required: Minister’s Private Secretary to advise the Head of Treasury and Investment Management that this decision has been approved, in order that the Head of Treasury and Investment Management may support the Treasurer to complete the related administration.

Signature:

 

 

Signed By: Minister for Treasury and Resources

Date Signed:

 

 

Date of Decision (If different from Date Signed):

 

 

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