Central banks signal: Australia is a safe haven
While Europe and Washington fiddle around fires of varying intensity, foreign central banks buying increasing amounts of commonwealth government bonds are sending a message: Australia is a safe haven.
The Reserve Bank board minutes fingered foreign central bank buying as a key factor in plunging commonwealth bond yields, but that was only part of a message of cautious confidence the RBA is seeking to impart.
No, the RBA doesn’t know exactly how big an impact North Atlantic wobbles will have on the rest of the world – nobody does – but Australia’s ability to deal with whatever happens next is fundamentally stronger, something gradually receiving greater recognition abroad.