RBA governor Glenn Stevens is interviewed in the Wall Street Journal
There is not much in it specific to RBA policy:
WSJ: When should the U.S. look to taper its bond-buying program?
Mr. Stevens: I think it will be a very delicate task, but I think the Fed knows that. It isn’t just the Fed, by the way. Highly unorthodox policies are being pursued in Japan as well and to a fair extent in Europe.WSJ: How to handle China’s growing economic clout?
Mr. Stevens: I think it is pretty clear China is already a very large economy and it is getting larger. I would assume that in the next decade its financial weight will grow along with its economic mass. That will be important.WSJ: Is Australia too reliant on China?
Mr. Stevens: Well, what’s the alternative? Say to China we don’t want to sell to you. China has a cycle and we will feel those cycles more. And I think there are issues for economic policy in general there—how we manage that across the cycle, and how we think about it. But that’s not a reason not to engage with China, because it is still enriching us. But we ought to do so in a way that recognizes that the fluctuations that they experience, we will feel them.
If that meant that we have bigger swings in terms of trade over the cycle, bigger swings in the exchange rate and bigger swings in the budget balance let’s say, we’ve got to think accurately about what all that means. The sensible response is not to disengage with China. It’s just to be across what all the full implications are.
There is more at Q&A: Reserve Bank of Australia Gov. Glenn Stevens
Stevens Discusses What Needs to Be Done to Ensure Living Standards Keep Improving
