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- RBA’s Bullock: Central bank will return to positive equity over time
RBA’s Bullock: Central bank will return to positive equity over time
Reserve Bank of Australia (RBA) Deputy Governor Deputy Governor Michele Bullock is speaking at an event hosted by Bloomberg, in Sydney. She is addressing the bond review report.
Key quotes
RBA’s accounting loss in 2021/22 was net AUD36.7 bln.
Loss on bond holdings took net equity to AUD-12.4 bln.
Negative equity position will not affect RBA's ability to do its job.
Can create money to meet our obligations, so RBA is not insolvent.
Will retain future profits, pay no dividend to govt until capital is restored.
Govt bond issuer will make an offsetting valuation gain on RBA bond holdings.
RBA will return to positive equity over time.
Market reaction
At the time of writing, AUD/USD is trading at 0.6688, down 0.05% on the day.
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