RBA's Debelle: Cross currency basis may not be sign of stress - Reuters
|Reserve Bank of Australia (RBA) deputy governor Guy Debelle crossed the wires, via Reuters, suggesting that an increase in the cross currency basis may not be a sign of stress and can be consistent with functioning markets.
Key quotes (via Reuters):
- More comfortable with the idea that increase in cross currency basis is not always a sign of market stress
- Increase in the basis can be consistent with functioning markets
- Wouldn't lose sleep over higher basis the "way that I literally lost sleep over it in 2008"
- RBA's return enhancement offered by the basis is "highly beneficial"
- RBA can swap a$ into yen for domestic liquidity management, can earn "substantial return" by swapping various reserve currencies it holds in yen
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