RBA Governor Stevens Comments

April 21, 2009 by · Leave a Comment 

RBA GOVERNOR STEVENS: AUSTRALIA’S ECONOMY IS IN RECESSION; SEES SIGNS OF RECOVERY IN CHINA

- Business investment likely to fall further, but households relatively optimistic
- Terms of trade to fall but unlikely to reverse recent years’ gains
- Long term economic prospects remain good
- Global economy is in much worse state than in 2001-02 recession
- Effects of monetary, fiscal stimulus to come through for some time yet
- Global growth to be lower than in prior decade for some time

Reserve Bank of Australia Cuts Interest Rates by 25 Basis Points

April 7, 2009 by · Leave a Comment 

The RBA has cut Interest Rates by 25BPS down to 3.00% from the previous 3.25%.  No change from 3.25% was expected.

- Board noted there was scope for modest rate adjustment
- Sees significant support to domestic demand in period ahead
- Capacity utilization expected to fall in 2009
- Demand for credit is weak, labor demand is weakening
- Impact of global stimulus not yet discernible, but should contain downturn over the rest of 2009
- Medium term inflation outlook likely to be lower than in prior 2 years

***The AUD initially sold off in response to the cut only to reverse the “knee-jerk” reaction and get bid across the board…

Reserve Bank of Australia’s Debelle on the Wires

March 31, 2009 by · Leave a Comment 

RBA’s Debelle: Disruptions in global markets undermine impact of policy stimulus at home; restoring financial confidence is necessary for global recovery

- Australia Market dislocation is smaller than elsewhere; Sees signs of improvement in domestic money markets and spreads
- Money market spreads are below crisis period average
- Sees less demand for term loans but will continue to offer them

Reserve Bank of Australia Financial Stability Review

March 26, 2009 by · Leave a Comment 

RBA Financial Stability Review: Banking system weathered financial crisis better than others, face tougher environment than in many years as problem loans rise

- Banking system remains soundly capitalized; Bad assets set at 0.5% of FY09 total assets
- Debt guarantees helped boost banking balance sheets; Banks offering credit at accommodating terms
- Housing credit still expanding
- Further softness in housing market still possible, but sector is not as vulnerable as in other economies
- Note: RBA’s Stability Review is published on a semi-annual basis

RBA’s Broadbent on the Wires

March 18, 2009 by · Leave a Comment 

RBA’s Broadbent: Sees Australia less affected by world events but its recovery still depends on a ‘global rebound’; more stimulus may be required

- Says world economy is in ‘unknown waters’; not seeing a global policy ‘traction’ as of yet
- Notes China is making the correct policy decisions
- US financial system is in need of a ‘lot of rebuilding’

Reserve Bank of Australia’s Battellino on the Wires

February 20, 2009 by · Leave a Comment 

RBA’s Battellino: Has no concerns about Australia’s sovereign rating; Companies are having trouble raising debt

- State governments will be able to borrow, debt on issue low.
- Says Australia’s federal govt also in strong position to borrow

Reserve Bank of Australia Governor Stevens on the Wires

February 10, 2009 by · Leave a Comment 

RBA Governor Stevens: Central banks must work with unconventional tools as rates cuts not working normally

- Reluctance of banks to lend is damaging global financial system
- Says central banks must revisit asset price problem
- World cannot retreat from risk taking

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