Let's reduce the RBA monthly meetings

Let's reduce the RBA monthly meetings
Let's reduce the RBA monthly meetings

There's one small change I'd like following the baton change of RBA governorship between the outgoing Glenn Stevens and Philip Lowe.

Let's cut the number of RBA Board meetings from the current 11 per year to eight.

Why put Australia through the angst every month, other than the January summer holiday break.

Incidently why do we get the Australian dollar detail against the US in every news bulletin? The weather yes, but do we really need currency updates on the hour?

As riveting each of the first Tuesday of the month RBA Board meetings are for the growing band of monetary policy devotees, I'd suggest the current timetable makes for disruptive overload.

Economist Stephen Koukoulas says no other country seems to have such an interest rate and monetary policy obsession.

"It's almost unhealthy how much attention is placed on the RBA interest rate decisions each month when most of those decisions are to keep rates steady.

"When rates are adjusted from time to time, the moves are usually well anticipated by the market," he said.

He suggests eight RBA Board meetings each year could be slated in for the Wednesday following the release of each quarterly consumer price index and quarterly national accounts with these releases feeding into RBA deliberations. 

Of course the RBA would maintain its ability to meet and adjust rates in emergencies outside of regular meetings.

The RBA has remained a hallowed institution through Glenn Stevens' 10 year tenure though it saw some worthy reforms especially introducing the release of the meeting minutes every month, but I don't see the need for press conferences as suggested recently by business columnist Alan Kohler.  

There's always the biannual appearance of senior RBA officials before the House of Representatives Economics Committee.

It was at one of these that the normally dour governor advised his Sydney home was "not a fibro house, but it is a piece of spec rubbish built in the 1970s, and in many respects it shows that."

I've loved his reserved, yet insightful, nature which last week saw more of the same when asked about the complex issue of quantitative easing, low interest rates and the increase in the money supply.

"Well, I'm very much hoping we never need to find out," he said before adding his test would be "Who went to Bunnings in the end as a result of that?" 

He suggested more borrowers would use low rates to accelerate the repayment "rather than going to Bunnings."

"And I'm hypothesising here," he said. 

"I think a lot more people are intent on trying to get to the point where they're carrying a lower debt load."

He supposes that people have changed their opinion about how much confidence they have in future asset values rising and how much leverage they're prepared to hold.

He says a lot of people now thought: "I'm going to be more careful."

He will get to sense over the side fence shortly as a property next door at Sylvania Waters has been listed for upcoming auction.

The four bedroom, two storey home on 600 sqm isn't too dissimiliar to the Governors.

The corner non-waterfront home last sold for $43,000 in 1971.

It has been listed through DJW Property with $1.35 million to $1.4 million price guidance, so that would represent around eight percent annual price growth.

Glenn Stevens and wife Susan have owned next door since 1992 when they paid $312,500.

This article was first published in the Saturday Daily Telegraph.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.


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