“Capital and liquidity positions are well above APRA regulatory requirementssaid Christopher Kent, Deputy Governor for Financial Markets at the Reserve Bank of Australia (RBA).
“Reserve Bank of Australia (RBA) Deputy Governor Christopher Kent also said that the full impact of interest rate hikes was taking longer to filter through to the economy due to a larger share of fixed-rate mortgages and savings accumulated by households during the pandemic“, Reuters has reported.
Additional comments
The RBA is well aware of the challenges borrowers are facing from rapidly rising rates.
Household savings accumulated during the pandemic add to the lag in monetary policy.
A wide range of borrowers appears to have accumulated considerable mortgage reserves.
This means that it is likely to take longer than usual to see the full effect of the interest rate hike in cash movements and household spending.
The bank will continue to closely monitor the transmission of monetary policy and its impact on household spending, the labor market and inflation.
The Board will respond as necessary to bring inflation back to its target within a reasonable time frame.
Volatility in Australian financial markets has picked up but the markets continue to function and, most importantly, Australian banks are unquestionably strong – banks’ capital and liquidity positions are well above regulatory requirements.
Australian banks were also well positioned to repay loans made to them by the RBA during the pandemic.with a first tranche of A$76 billion maturing between April and September.
additional statements
Apart from the opening statements mentioned above, Kent also tried to sound optimistic. through the following comments.
We do not participate in the swap operation of central banks.
Banking problems are just one of many monetary policy considerations.
The global banking system is much stronger than it was a decade ago.
Problems affect a few mismanaged institutions.
The impact on Australian markets has been modest.
The Board will take financial conditions into account when deciding fees.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
