Articles on Reserve Bank of Australia

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Floating the Australian dollar helped us flourish - but was no panacea to all economic ills. Image sourced from www.shutterstock.com

The float Australia had to have?

The Australian dollar was floated this day in 1983. By 1985, it seemed to take on water, list badly, and sink. And that actually was the idea. The real exchange rate – roughly, the dollar rate, adjusted…
Down? Stay as it is? Commentators are divided about the direction of the cash rate. Image sourced from www.shutterstock.com

Stay the course with interest rates: shadow board

The Reserve Bank of Australia should leave interest rates unchanged this month according to the consensus of Shadow Reserve Board members. Amid market uncertainty over whether the RBA board may choose…
An about-face by the Australian Financial Markets Association on the way our bank bill swap rate is calculated comes as the US mortgage giant Freddie Mac filed a lawsuit alleging unlawful conduct by a number of investment banks. AAP

Is there egg on the RBA’s face?

Last week, the Australian Financial Markets Association (AFMA), the investment bankers’ trade union, announced that it was changing the way that it calculated the Bank Bill Swap rate (BBSW), the Australian…
Despite continuing unrest in Europe - particularly Cyprus - the global economy has firmed, say Shadow Reserve Bank commentators.

RBA: rates should hold, with a gradual return to neutral

The consensus of the nine members of the Shadow Board is that the Reserve Bank of Australia should leave interest rates unchanged from March at 3.00%. But the balance of risks implies rates should rise…
As the ABC’s Four Corners explored, small investors are being caught in an unregulated investment market, often with devastating results. Has the corporate regulator dropped the ball - or is it juggling too many? ABC Four Corners

As casualties pile up, has our investment sector become too big to regulate properly?

Stephen Long’s story last night on the ABC’s Four Corners beautifully illustrated the human cost of financial misconduct, as retirees and widows described the pain of having lost their super funds and…
A number of Shadow Bank commentators point to a slight uplift in the housing market as a sign that interest rates should rise in the medium term.

Interest rates should stay on hold, for now

No change remains the consensus of the nine members of the Shadow Board in the Reserve Bank of Australia holding interest rates unchanged from February at 3.00%. But rates need to rise significantly within…
If there’s one thing we can say with certainty, it’s that economic forecasting is far from an exact science. Image from www.shutterstock.com

When it comes to economic forecasting, it’s wise to admit to uncertainty

One certainty about economic forecasts is that, almost certainly, they will prove to be incorrect. The best forecasters can hope for is not to make systematic errors – to get it right on average – and…
A blunt instrument: the case for interest rates to rise is strengthened by rising unemployment and a persistently high Australian dollar which has defied previous cuts. AAP

Rate cut unlikely, but the forward path for interest rates will be up

The Shadow Reserve Board, an initiative of the Centre for Applied Macroeconomic Analysis (CAMA) made up of eminent industry and academic economists, returns this month. Reserve Bank of Australia board…
The Reserve Bank of Australia is expected to keep the cash rates unchanged tomorrow: but prominent economists say the case for a cut may be firming. AAP

Hold ‘em: but case for interest rate cut strengthens

CAMA’s Shadow Board, which gives its views ahead of the decision by the Reserve Bank of Australia, continues to support the current setting of the cash rate at 3.5%. But economists are seeing a greater…
RBA Governor Glenn Stevens denies any cover-up over allegations surrounding two RBA subsidiaries. But how well are public institutions dealing with issues of transparency, corruption and whistleblowing?

Is the Federal Government dropping the ball on whistleblower protection?

The latest scandal engulfing Note Printing Australia and Securency highlights how well - or otherwise - the public sector deals with critical issues of transparency, corruption and whistleblowing. The…
Some commentators have suggested that the RBA should intervene in currency markets to tame the Australian dollar. But is this a wise move? betta design

Should the RBA act on the high Australian dollar? Experts respond

As foreign central banks continue to park their money in our triple-A rated bonds, the Australian dollar continues its inevitable ascent. The dollar traded as high as US106.03¢ after the RBA left the interest…
To ensure a sound financial system, policymakers should balance the twin objectives of stability and competition.

Is competition crucial to the health of the financial sector? You can bank on it

Reactions to my call this week for another inquiry into Australia’s financial system have been mixed. Most commentators seem to accept that there’s logic in having another inquiry, even if some think that…
The reserve bank should hold the cash rate steady tomorrow – but CAMA’s Shadow board members see greater uncertainty long term. AAP

RBA should hold rates, but longer term uncertain

_The Conversation, in conjunction with the Centre for Applied Macroeconomic Analysis (CAMA), presents the monthly findings of the Shadow Board, prior to the meeting of the Reserve Bank of Australia Board…
With the rest of the world mired in economic crises, it seems Australia is the place for foreign central banks to park their assets. Krug6

The boom has made the dollar a dazzler, but Australia is hardly a safe haven

Central banks everywhere - from Russia to the Czech Republic - are piling into Australian-dollar-denominated assets. This has limited the fall of the Australian dollar to around 3% from its peak even though…
The Reserve Bank of Australia should keep interest rates on hold, say a group of influential economists. AAP

Keep rates on hold, says CAMA shadow board

_The Conversation, in conjunction with the Centre for Applied Macroeconomic Analysis (CAMA), will present the monthly findings of the Shadow Board, a day before the Reserve Bank of Australia Board meets…
Given the RBA’s decision to slash the cash rate by 50 basis points, it’s hard to justify Treasurer Wayne Swan’s pursuit of a budget surplus. AAP

Cutting rates, then tightening fiscal policy? Trying to make sense of the quest for a surplus

The former Governor of the Reserve Bank, Bernie Fraser, hit the nail on the head the other night when he found it absurd that the Reserve Bank could be reducing interest rates one day, while a week later…
RBA governor Glenn Stevens will no doubt be portrayed in a flattering light if the board cuts rates today: but not everyone is a winner. AAP

Not everyone wins when interest rates fall

UPDATE: The Reserve Bank of Australia has cut Australia’s official cash rate by a larger-than-expected 50 basis points, to 3.75%. In the likely event that the Reserve Bank Board chooses to ease the target…
Publishing long-term interest rate projections can allow the Reserve Bank to operate with greater transparency. AAP

A route to greater transparency and independence for the RBA

Today, all eyes will be on the Reserve Bank amid speculation that the cash rate will be eased by at least 25 basis points. The RBA has often faced pressure from politicians and business leaders to reduce…

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