Ridout ready for RBA
(9 February 2012 – Australia) Reserve Bank of Australia (RBA) newcomer Heather Ridout is aiming to bring the perspective of the country’s manufacturers to the central bank this year.
She said there was too much froth in the Australian currency, with "speculative" buying stoked by rate differentials which have spurred the local dollar.
Ridout is leaving the Australian Industry Group to join the RBA board and she will also boost its diversity, becoming the fourth woman to serve on the 52-year-old board.
‘‘I’m a growth girl, but I’m not a stupid one,’’ Ridout said in Sydney. ‘‘Sometimes we underestimate our capacity for growth in this country,’’ she said, adding Australia had been ‘‘quite conservative’’ on the issue.
Investors are pricing in a 60 percent chance the RBA will lower borrowing costs when it meets next month, according to Bloomberg calculations based on cash-rate futures.
‘‘I do think monetary policy has been given an awful lot of support in Australia by the high dollar and it does need to be factored in,’’ Ridout said in an interview with The Sydney Morning Herald three hours before the RBA decided against a rate cut. ‘‘I’m sure the bank does. But I will be making those points pretty strongly when I sit at that table.’’
RBA Governor Glenn Stevens trimmed the nation’s benchmark interest rate by a quarter percentage point to 4.5 percent on Nov. 1 and to 4.25 percent Dec. 6 to help revive household demand and hiring.
Even after the reductions, Australia has the highest benchmark borrowing cost among major developed nations. Policy rates in Japan and the U.S. are near zero, while the European Central Bank has its benchmark at 1 percent.
‘‘We used to be a proxy for world growth, now we’re a safe haven because we’re well regulated,’’ Ridout said. ‘‘I think Australia hasn’t had this argument with itself.’’
Ridout is leaving the Australian Industry Group to join the RBA board and she will also boost its diversity, becoming the fourth woman to serve on the 52-year-old board.
‘‘I’m a growth girl, but I’m not a stupid one,’’ Ridout said in Sydney. ‘‘Sometimes we underestimate our capacity for growth in this country,’’ she said, adding Australia had been ‘‘quite conservative’’ on the issue.
Investors are pricing in a 60 percent chance the RBA will lower borrowing costs when it meets next month, according to Bloomberg calculations based on cash-rate futures.
‘‘I do think monetary policy has been given an awful lot of support in Australia by the high dollar and it does need to be factored in,’’ Ridout said in an interview with The Sydney Morning Herald three hours before the RBA decided against a rate cut. ‘‘I’m sure the bank does. But I will be making those points pretty strongly when I sit at that table.’’
RBA Governor Glenn Stevens trimmed the nation’s benchmark interest rate by a quarter percentage point to 4.5 percent on Nov. 1 and to 4.25 percent Dec. 6 to help revive household demand and hiring.
Even after the reductions, Australia has the highest benchmark borrowing cost among major developed nations. Policy rates in Japan and the U.S. are near zero, while the European Central Bank has its benchmark at 1 percent.
‘‘We used to be a proxy for world growth, now we’re a safe haven because we’re well regulated,’’ Ridout said. ‘‘I think Australia hasn’t had this argument with itself.’’
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