MNI BRIEF: RBA Says Financial System Robust
MNI (SYDNEY) - Australia’s financial system remains robust despite indicators of household financial stress increasing, the Reserve Bank of Australia's Financial Stability Report revealed Thursday.
“Overall, households have remained resilient to the effects of high interest rates and inflation. However, pockets of stress remain, and debt-servicing and cost-of-living pressures continue to disproportionately affect lower income households,” the reported noted. (See charts) "Budget pressures from high inflation and restrictive monetary policy continue to be felt across the Australian community, but the share of borrowers experiencing severe financial stress remains small."
The report added vulnerabilities within China’s financial system have been exacerbated by the ongoing weakness in the real-estate sector. “A further loss of confidence – absent a timely and significant response from the Chinese authorities – could see stress spill over to the rest of the Chinese economy and financial system, which would likely affect Australia and the rest of the world through trade and risk aversion channels.”