Australian Treasurer Wayne Swan will eschew European-style austerity as a stronger currency slows growth, wagering the government can win a Sept. 14 election fought on jobs and absorb the pain of a broken surplus promise.
Australia plans to scrap the panel that sets its benchmark interbank borrowing rate, becoming the first major developed economy to replace its rate-setting regime following the global Libor-rigging scandal.
Incoming Australian central bank board member Heather Ridout aims to bring more attention to the nation’s overvalued exchange rate as she joins the policy debate amid deliberations on lowering interest rates.
Reserve Bank of Australia Governor Glenn Stevens is betting a stronger currency will help contain inflation and allow him to extend an interest-rate pause to help the economy recover from a possible first-quarter slump.
The Reserve Bank of Australia’s signal that it’s preparing a cut in its forecasts for growth reduces the chance Governor Glenn Stevens will add to the developed world’s highest borrowing costs before year-end.
For the first time in three years, Australia’s interest-rate swaps indicate investors are concerned Reserve Bank Governor Glenn Stevens may raise borrowing costs earlier than is needed to curb inflation.