- Glenn Stevens, Reserve Bank of Australia Governor
Speculations about any adjustment of the monetary policy by the Reserve Bank of Australia any time soon have already been extremely low. After reiterating the pledge to keep interest rates at a record-low level during the last policy meeting and keeping in mind planned spending cuts and the fact the economy is still transitioning from mining-investment led growth, pushed bets even lower. Stevens claimed that after a "global panic" in 2008, the world economy avoided a repeat of the depression seen in 1930s and a set of quick actions by central banks supported the economy. However, the recent rise in government debt is a difficulty. Moreover, fiscal policy had smaller impact on the economy than it was additionally thought. Stevens also claimed that in case companies and households do not wish to take on new business risks, central banks cannot push them.
These comments looks really disappointing, however, the Governor also pointed out that there is a "huge potential" for both private and public investment in infrastructure. Efforts aimed at completing the main financial regulatory initiatives should, in theory, deliver less uncertainty and a safer system, also not necessarily crimping growth. After the speech the Aussie jumped 0.15% to 0.9386 against the greenback and hit an intra-day high of 0.9393.
© Dukascopy Bank SA