Reserve Bank of Australia Christopher Kent, Assistant Governor (Financial Markets)

In Q&A now.

  • Says the Australian dollar would have risen even further on the back of commodities if not for RBA policy
  • there is a key role for fiscal policy in the economic recovery, welcomes its use

On fiscal policy in Australia, its about to get much less supportive with the scheduled end of JobKeeper support. With widespread vaccination still a long, long way off and further COVID-19 waves and accompanying shutdowns still a danger the RBA will be sweating it. They may be left to try to combat any slowdown with monetary policy alone.

More:

  • tight labour market is required for faster inflation
  • substantial spare capacity in the economy will take time to close.

And:

  • monetary policy is set by focusing on domestic codnitions
  • if other central banks pull back on easing that would lower the AUD