An opinion piece in the Australian Financial Review says that the Reserve Bank of Australia should intervene ... "RBA should sell the $A to solve its problems"
Yeah, ask the SNB, it worked real well for them, right?
Meddlers gonna meddle
OK, here we go ...
There is a solution to the Reserve Bank of Australia's current conundrum: stealthy currency intervention, which would restore much needed balance to its policy mix.
OK, cards on the table ... I strongly disagree.
But, he makes reasonable points too:
The contemporary problem is that the interest rate sensitive sectors of Australia's economy do not need any more stimulus ... Probably the most expensive and leveraged housing market in the developed world is now firmly entrenched in "bubble" territory
The constraints on the RBA are tighter than peers overseas because the ratio of Australian house prices and housing debt to family incomes is much higher than most other countriesThese vulnerabilities are amplified by the fact Australia has the most concentrated and expensive banking system in the world and the majority of bank assets comprise loans secured against residential property
He goes on, stating the obvious reason the RBA should probably butt out ...
The RBA's reticence to intervene in this cycle is probably related to the fact that foreign exchange losses in 2010 and 2011 almost destroyed all its capital, convincing theTreasurer
Uh, yeah.
But, then there is this gem ...
But this time is different
Oh dear ....
As a contact has just said to me ... Was a better sell at $1.10
Yes, and now we've got a columnist urging the RBA to sell at 0.76???
Dear oh dear.
Anyway, the article is ungated: RBA should sell the $A to solve its problems
Make up your own mind.
