Australia's central bank sees signs of credit squeeze easing |
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Tue, 28 Aug 2007 00:42
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SYDNEY (Thomson Financial) - The Reserve Bank of Australia (RBA) can provide more liquidity to the banking system if neededthough there are some signs that the recent credit squeeze is easing both in Australia andoverseas, deputy governor Ric Battellino said Tuesday.Battellino said the steps taken by the central bank to ease upward pressure on interest rates had helped stabilise market conditions somewhat.'In recent days, there have been some encouraging signs of improvement in markets, both herein Australia and overseas,' Battellino said in a speech at a finance conference.The RBA has been injecting extra cash into Australia's banking system since Aug 10, whenproblems in US subprime mortgages spilled over into money markets, affecting liquidity.'The bank will continue to monitor the situation carefully. If market developments warrant, the bank has scope to further expand the provision of liquidity,' Battellino said.He said the RBA's measures, and those from other central banks, should not be seen as anattempt to bail out the markets.'The measures have been technical operations aimed at breaking up the log jams in money markets and encouraging funds to flow again, in order to prevent monetary conditions becoming tighter,' he said.Battellino said though Australian banks are in very sound condition and have been experiencing minimal credit losses, they were nonetheless affected by the spread of the global money market turmoil.bruce.hextall@thomson.combhx/msCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
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Investec's Du Toit says credit turmoil may prove best time to invest 