Calculation of the reserve requirement during the holidays in December 2002

CIRCULAR LETTER Series of 2002

TO:          All Banks and NBQBs

To clarify the calculation of the reserve requirement during the forthcoming extended holidays in December 2002, please consider the following:

1.   December 24, 25 and from December 28, 2002 to January 1, 2003 shall be considered as non-reserve days.

2.   The bank's/NBQB's reserve position at the close of December 23, 2002 shall be carried over for December 24 - 25, 2002 while the reserve position as calculated as of December 27, 2002 shall be applied for the period December 28, 2002 - January 3, 2003, and;

3.   The reserve weeks, December 20 to 26, 2002 and December 27, 2002 to January 2, 2003, shall be considered as a single reserve week for the purpose of determining "abuse" of the privilege of offsetting reserve deficiencies against excess reserves during that reserve week.

For compliance.

ALBERTO V. REYES Deputy Governor