BANKS AND BANKING

No doubt interest rates will continue to climb: RBA

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Original article by Ronald Mizen
The Australian Financial Review – Page: 2 : 19-Oct-22

The Reserve Bank of Australia’s deputy governor Michele Bullock says inflation is still too high and further rises in the cash rate will be necessary in order to return it to the RBA’s target range of 2-3 per cent. Bullock has told the Australian Finance Industry Association’s annual conference that the RBA believes that it can reduce the inflation rate while avoiding a recession and preserving most of the jobs that have been created in recent times. Meanwhile, the minutes from the RBA’s latest meeting show that the board was of the view that slowing the pace of rate rises in October will give it time to assess incoming economic data.

CORPORATES
RESERVE BANK OF AUSTRALIA

RBA slows its rate pace from breakneck to merely galloping

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Original article by Patrick Commins
The Australian – Page: 1 & 4 : 5-Oct-22

Reserve Bank of Australia governor Philip Lowe has indicated that further interest rises are likely as the central bank seeks to bring inflation under control. The RBA defied the expectations of most economists and investors by increasing the cash rate by just 25 basis points on Tuesday, lifting it to 2.6 per cent. The RBA has become the first major central bank to scale back the size of interest rate increases in the current monetary policy tightening cycle, having increased the cash rate by 50 basis points at each of its previous four monthly board meetings. Australia’s four major banks have increased their variable mortgage interest rates by 25 basis points in line with the cash rate.

CORPORATES
RESERVE BANK OF AUSTRALIA

Interest rates: Ghost of ’89 may come to haunt us

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Original article by Patrick Commins
The Australian – Page: 2 : 4-Oct-22

National Australia Bank’s chief economist Alan Oster expects the cash rate to rise by 50 basis points on Tuesday, followed by a 25 basis point increase in November. However, he warns that the nation could pay a heavy price for a "policy mistake" by the Reserve Bank of Australia’s board, noting that the central bank’s aggressive tightening of monetary policy in 1989 ultimately led to a recession and a sharp rise in the unemployment rate. Oster is not predicting a recession in Australia at this stage, but he says the worsening global economic outlook will inevitably have an impact in Australia.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA

Higher interest rates tipped to bite

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Original article by Ronald Mizen
The Australian Financial Review – Page: 1 & 4 : 3-Aug-22

Reserve Bank of Australia governor Philip Lowe has reiterated that higher interest rates are necessary to return inflation to the target range of 2-3 per cent and to create a sustainable balance of demand and supply. Financial markets are now pricing in a cash rate of three per cent by December, following the RBA’s third consecutive increase of 50 basis points on Tuesday. The cash rate is now at a six-year high of 1.85 per cent, and many economists expect a rate rise of either 25 or 50 basis points in September. Meanwhile, the RBA has downgraded its economic growth forecast for both 2023 and 2024 to just 1.75 per cent, while it expects the official unemployment rate to reach four per cent by the end of 2024.

CORPORATES
RESERVE BANK OF AUSTRALIA

Chalmers seeks more RBA board diversity

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Original article by John Kehoe
The Australian Financial Review – Page: 3 : 27-Jun-22

The independent review of the Reserve Bank of Australia is slated to report to the federal government in mid-2023. Treasurer Jim Chalmers has indicated that the size and composition of the RBA’s board are among the issues that will be considered; he says the government wants the board to be comprised of people representing all parts of Australia and all parts of the economy. The RBA board is currently dominated by people from the business sector, but there have been calls for it to include more economists. ACTU secretary Sally McManus has in turn advocated having a union representative on the board for the first time since the 1990s.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, ACTU

Lowe prompts double jump in rate forecasts

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Original article by Alex Gluyas
The Australian Financial Review – Page: 27 : 16-Jun-22

Financial markets have now fully priced in a 50 basis point increase in the cash rate at the Reserve Bank of Australia’s monthly board meeting in July. Financial markets also expect official interests to rise to four per cent by early 2023, compared with just 0.85 per cent at present. Investment bank Goldman Sachs expects the cash rate to rise by 50 basis points in July and the following two months; it had anticipated 25 basis point rate rises in August and September prior to recent comments by RBA governor Philip Lowe regarding the outlook for inflation and interest rates.

CORPORATES
RESERVE BANK OF AUSTRALIA, GOLDMAN SACHS AUSTRALIA GROUP HOLDINGS PTY LTD

RBA opens door to 2022 rate rise

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Original article by Ronald Mizen
The Australian Financial Review – Page: 1 & 4 : 3-Feb-22

Reserve Bank of Australia governor Philip Lowe has signalled that official interest rates could potentially rise before the end of 2022 if the economy continues to perform well. However, he has downplayed suggestions that the cash rate may be increased four times in 2022, arguing that Australia’s inflation rate is still well below that of countries such as the US and the UK. Lowe also said that the unemployment rate could soon fall below four per cent. The Commonwealth Bank still expects the cash rate to be increased in August.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Lowe keeps nation guessing on rates

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Original article by Patrick Commins
The Australian – Page: 1 & 5 : 2-Feb-22

Reserve Bank of Australia governor Philip Lowe has downplayed speculation that official interest rates will rise in 2022. Lowe stated that although inflation has increased, it is not yet sustainably within the central bank’s target range of 2-3 per cent. This has been identified as a prerequisite for increasing the cash rate, which was left at a record low of 0.1 per cent on Tuesday. The RBA will also end its quantitative easing program. Meanwhile, Lowe has forecast that core inflation will peak at 3.25 per cent, compared with 2.6 per cent at present, while he expects the unemployment rate to fall below four per cent later in 2022.

CORPORATES
RESERVE BANK OF AUSTRALIA

Economists give Lowe a pass for 2021, except for one thing

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Original article by Ronald Mizen
The Australian Financial Review – Page: 3 : 7-Jan-22

A survey of 23 economists regarding their views on the performance of the Reserve Bank in 2021 has seen RBA governor Philip Lowe score 72.5 per cent for his leadership. The RBA scored 76 per cent on management of monetary policy, while its communication of policy and intentions scored 66 per cent. The only area in which the economists felt that the RBA failed was in regards to its termination of its policy to suppress the yield on three-year Treasury bonds, which received only 41 per cent support.

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RESERVE BANK OF AUSTRALIA

New Covid variant could hit RBA’s plans to taper

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Original article by Ronald Mizen
The Australian Financial Review – Page: 8 : 22-Dec-21

The minutes of the Reserve Bank of Australia’s monthly board meeting for December show that the central bank remains upbeat about the outlook for the economy. The RBA does not expect the new Omicron variant of COVID-19 to "derail" the nation’s economic recovery. However, the variant may affect the RBA’s timetable for winding back quantitative easing.

CORPORATES
RESERVE BANK OF AUSTRALIA