Australia press: Australian government not happy with RBA neutral bias on interest rates

View Comments

  • A report in the Australian Financial Review (gated) overnight says that the move by the Reserve Bank of Australia (RBA) to a “neutral bias” on monetary policy has angered the Abbott government
  • Treasurer Joe Hockey is said to have to personally made the government’s displeasure known to the RBA as the dollar’s rise will exacerbate budget challenges
  • Senior government sources told the AFR that while the government appreciated the RBA’s concern about property prices, the change to a neutral policy setting had been a major factor in the recent jump in the value of the local currency

The government has also said in the past that it supports RBA independence on monetary policy. Go figure. What a surprise they aren’t happy now rates appear to have stopped falling. Predictable ****ers, aren’t they?

Author: Eamonn Sheridan

Eamonn Sheridan worked with Bankers Trust Australia for 13 years as a Spot foreign exchange dealer, trading across all major currencies and all time zones. He rose to a Vice President position, running spot operations during the busy European time, leaving the bank just prior to it being sold to concentrate on running his own business in the ‘real world’! The markets, however, had him hooked – he continued to trade equities, CFDs and then on to futures, giving him broad experience across financial markets. He is now active in FX and equity index futures as well as writing for ForexLive™. Eamonn is a graduate of The University of Melbourne in Australia and lives in New South Wales.


All|Australian Dollar|Central Banks|Reserve Bank of Australia

Interest Rates|RBA

Eamonn Sheridan


  1. That looks just like my cat! :)

  2. I liked that pic – nice cat :-D

  3. Start selling Aud there is no way to go but down. Go back to last August RBA economic accessment low growth in 2014 to pick up in 2015 but the pick up in growth was to come from another 10 per cent decline in the AUD which at that time was 9100 cents so top side is limted to stop loss hunting

  4. I want to see 1.4885, to have AUD retake the Bretton woods high against the USD. I can imagine the government’s fury and horror at those levels!

  5. :-D

  6. Cambiste, the RBA did assume the current rate (at the time of their analysis) of 0.9100 for their forecasts made in August. But I don’t think changing their assumed exchange rate to 0.9300 or 0.9400 would have a significant impact on their forecasts, although it would of course have some impact. Also, they assumed commodity prices as being a little lower than they are now, so this has probably worked to the AUD’s favor a bit. Their may be other reasons to short though, but the better than expected data out of Australia recently means I’m too nervous to short AUD right now.


© Copyright 2015 ForexLive™  |  Advertise With Us  |  Login To Comment  |  Sitemap

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.