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Operations Will Not Be Impacted By Loss

RBA

RBA’s Deputy Governor Bullock is speaking on the bank’s Bond Purchase Program in the aftermath of the review of the BPP.

  • She notes that the BPP achieved its aims and reduced borrowing costs and the exchange rate, and so supported the economy. It lowered government yields by about 30bp and semis more than that.
  • The RBA will make an accounting loss in its 2021-22 accounts (released in October), which will also show the bank moved into negative equity. This result will not prevent the central bank from operating as usual.
  • The bonds on the RBA’s balance sheet will be allowed to mature and shrink the balance sheet. So over time the bank will return to positive earnings and positive equity.
  • Her points can be read in the BPP Review and the text of her talk at these links.

https://www.rba.gov.au/monetary-policy/reviews/bond-purchase-program/

https://www.rba.gov.au/speeches/2022/sp-dg-2022-09-21.html

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