Reserve Bank of Australia Deputy Governor Guy Debelle speaking, topic is "A Balance of Payments".
- says threats to free trade system pose "significant risk"
- Australia's current account deficit narrowest as share of GDP in many decades
- mix of Australia's foreign liabilities are not a vulnerability
- vast bulk of Australia's foreign debt liabilities in Australian dollars
- large share of Australia's foreign assets denominated in foreign currency
- this means Australia has a net foreign currency asset position
- thus when AUD falls the value of net foreign liabilities actually declines
- allows AUD to play important role of shock absorber to external shocks
- Australian equity investment abroad exceeds foreign equity investment in Australia by 7% of GDP
- compared to average net equity liability position of 10% of GDP between 1990 and 2010
- shift reflects investment in foreign equity by Australian superannuation industry
Headlines via Reuters. Bolding is mine.
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