Mired in red ink: Turns out the RBA’s money printing was no free lunch
The Reserve Bank’s $37 billion loss shows there was no free lunch in its extraordinary monetary interventions during the pandemic. Just as well the RBA can’t go bankrupt.
If the Reserve Bank of Australia was a commercial bank or hedge fund, it would be bankrupt.
The RBA reported on Wednesday that it plunged into negative equity of $12.4 billion last financial year after reporting an accounting loss of $36.7 billion – an inevitable loss The Australian Financial Review foreshadowed in a series of articles for more than a year.
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John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
