Australian banks access large and deep foreign funding markets to supplement their domestic funding. Looking at the major banks’ worldwide operations, such offshore funding accounts for about one-third of their assets. This funding is raised in a variety of ways, across several countries and by various entities within the banking groups. While offshore funding can create vulnerabilities, these are appropriately mitigated by various factors. It would nonetheless be desirable for banks to continue to lengthen the maturity of their offshore debt securities.

Potential growth is the rate of growth that an economy can sustain over the medium term without generating excess inflation. Potential growth has declined in the advanced economies in recent decades due to lower growth in the labour force, capital stock and productivity. Current projections and long-term growth expectations suggest that the low rates of potential growth in advanced economies will persist for some time.

Slowing trend growth in China, and the risks around this trajectory, are relevant to the future economic prospects of its major trading partners, including Australia. This article provides a long-term perspective on growth in China, beginning with a review of historical trends. It then examines the drivers of growth since reforms were introduced in the late 1970s and how these drivers are affecting the growth outlook. The article concludes that a range of structural headwinds will constrain growth in the coming decade, posing challenges for policymakers.

Australia was the first country to issue a full series of polymer banknotes, completed over 1992–96. After 25 years, issuance of the second generation of polymer banknotes is well advanced. It seems appropriate, therefore, to revisit the financial savings resulting from the switch to polymer. Employing a cost-benefit analysis framework, we find that the switch to polymer has resulted in net savings of close to $1 billion over the past 25 years in inflation-adjusted terms. This does not take account of the benefits of reduced counterfeiting, which have also been substantial and were the original motivation for switching to polymer. We also discuss cost savings arising from outsourcing banknote distribution to the private sector, as well as seigniorage income which accrues from banknotes on issue and which ultimately flows to the Australian Government as non-tax revenue in the form of the dividend payment from the Reserve Bank.

Australia is closely integrated with global capital markets. This integration has been of benefit to the economy, but also means that Australian financial conditions are influenced by developments abroad. The flexible exchange rate regime partially insulates the economy from global financial conditions. In particular, that flexibility means that monetary policy in Australia does not need to move in lock step with policies of the major central banks. However, to meet its objectives for employment and growth, the Reserve Bank can choose to offset pressure on the exchange rate from shifts in foreign monetary policies. Indeed, for much of the past decade or so, forces underpinning the structural decline in global risk-free rates have placed downward pressure on interest rates offshore and in Australia. International investors’ willingness to take risk also has an important bearing on domestic financial conditions.

The Reserve Bank of Australia has a unique and rich archives. In addition to records about the nation’s central bank, the archives contain records about Australia’s economic, financial and social history over almost two centuries. The extent of the collection reflects the Bank’s lineage, with its predecessor (the original Commonwealth Bank of Australia) having absorbed banks with a colonial history. Consequently, the Bank’s archival collection spans convict banking records through to information about contemporary episodes in Australia’s history. This article explains why the archives exist, how they are managed and plans to make them more accessible to the public.

Thank you for the invitation to address this year's Australian Payments Network Summit. This summit has become an important fixture on the Australian payments calendar and this is the third time I have had the privilege of joining you.

A recurring theme across these summits has been the need to improve customer outcomes. I am very pleased to see that this focus has been continued at this year's summit. The focus on customer outcomes aligns very closely with the focus of the Payments System Board. The Board wants to see a payments system that is innovative, dynamic, secure, competitive, and that serves the needs of all Australians.

Increasingly, this means that the payments system needs to support Australia's digital economy. With the digital economy being an important key to Australia's future economic prosperity, we need a payments system that is fit for purpose. We will only fully capitalise on the fantastic opportunities out there if we have a payments...

The Chart Pack summarises macroeconomic and financial market trends in Australia and provides some information about developments for our main trading partners. The graphs in the Chart Pack are updated monthly. For more information about the source data for the Chart Pack graphs, see Data Availability. The Reserve Bank also publishes extensive statistical data on our website.

Browse the left-hand navigation to choose the graph subject category. You can then view or download the graphs individually.

Financing conditions and the housing market. Council members discussed trends in credit and recent developments in the housing market. Growth in housing credit remains subdued overall, with credit to investors particularly weak. Owner-occupier loan commitments and housing turnover in Sydney and Melbourne have picked up, suggesting that a strengthening in credit growth is likely. Mortgage lending standards have been broadly unchanged recently. Overall, near-term risks related to the housing market have lessened as housing market conditions nationally have improved. Members discussed the potential for the current weakness in apartment construction to place upward pressure on prices in some cities over time unless construction picks up. They also discussed the tight credit conditions for small businesses and the reduced risk appetite by many lenders for lending to small business. Responsible lending. Members discussed ASIC's plans to release updated guidance on responsible...

Release date: 2 December 2019

Preliminary estimates for November indicate that the index decreased by 3.5 per cent (on a monthly average basis) in SDR terms, after decreasing by 6.6 per cent in October (revised). The non-rural subindex decreased in the month, while the rural and base metals subindices increased. In Australian dollar terms, the index decreased by 3.7 per cent in November.

Over the past year, the index has decreased by 5.0 per cent in SDR terms, led by lower coal, LNG and alumina prices. The index has increased by 0.2 per cent in Australian dollar terms.

Consistent with previous releases, preliminary estimates for iron ore, coking coal, thermal coal and LNG export prices are being used for the most recent months, based on market information. Using spot prices for the bulk commodities, the index decreased by 3.1 per cent in November in SDR terms, to be 8.1 per cent...

Thank you for the invitation to address this year's Annual Dinner of the Australian Business Economists. This is the fifth time I have had the privilege of joining you. Thank you for having me back.

One recurring theme of my talks over the years has been the likelihood that interest rates will remain low for an extended period – certainly, much lower, on average, than before the global financial crisis.

This theme remains highly relevant today. As I discussed in the Sir Leslie Melville lecture at the ANU a month ago, low interest rates are not a temporary phenomenon. Rather, they are likely to be with us for some time and are the result of some powerful global factors that are affecting interest rates everywhere.

Given this assessment, it is not surprising that there is a lot of discussion internationally about the use of so-called ‘unconventional’ monetary policies. People are rightly asking: if interest rates are going to stay low and be...

Over much of the past three years, employment has grown at a healthy annual pace of 2½ per cent. This has been faster than we had expected, particularly so, given economic growth was slower than we had expected. Employment growth has also been faster than the working-age population has been growing. As a result, the share of the Australian population employed is around its all-time high, which is a good outcome. Normally, we would have expected this strong employment growth to lead to a decline in the unemployment rate. But the unemployment rate has turned out to be very close to what we had expected and has moved sideways around 5¼ per cent for some time now.

So what is going on here? Strong employment growth but little change in the unemployment rate means that the strength in labour demand has been met by strong growth in labour supply. This increase in labour supply has come from more people joining the labour force and from some of those...