Stevens, Swan still has plenty of ammo
(16 October 2012 – Australia) Reserve Bank of Australia (RBA) governor Glenn Stevens reiterated that the country still has room to adjust interest rates in response to further global slowdown.
During a seminar at the International Monetary Fund (IMF)’s annual meeting in Tokyo, Stevens said: "On monetary policy, we have ammunition."
"Unusually for an advanced country, we actually have materially positive interest rates, so if needed we have scope to move there as long as inflation is okay, which at present it seems to be."
Stevens noted that Australia’s banking system is profitable and well-capitalized, and the nation’s finances are strong.
The RBA has "maximum flexibility" to reduce the key rate if needed as the government returns Australia’s finances to surplus, Treasurer Wayne Swan said on Sunday.
"These headwinds mean we’ll have to find some substantial savings to return the budget to surplus," Swan said in Sunday’s statement. "A surplus is our best defence in uncertain times for the global economy and shows we are committed to responsible budget management."
"Unusually for an advanced country, we actually have materially positive interest rates, so if needed we have scope to move there as long as inflation is okay, which at present it seems to be."
Stevens noted that Australia’s banking system is profitable and well-capitalized, and the nation’s finances are strong.
The RBA has "maximum flexibility" to reduce the key rate if needed as the government returns Australia’s finances to surplus, Treasurer Wayne Swan said on Sunday.
"These headwinds mean we’ll have to find some substantial savings to return the budget to surplus," Swan said in Sunday’s statement. "A surplus is our best defence in uncertain times for the global economy and shows we are committed to responsible budget management."
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