Oct 25 2024: Australia’s central bank reported a $2.78 billion (A$4.2 billion) accounting loss for the year ending June 30, marking its fourth consecutive year of losses due to pandemic-era financial interventions. Much of the loss stems from the low-yield bonds and assets the bank acquired at minimal interest rates during the pandemic, resulting in income that falls short of what it pays commercial banks on deposits.
These cumulative losses since 2021 have pushed the Reserve Bank of Australia (RBA) into a negative equity position of A$20.4 billion as of June 30. Despite this, the bank’s monetary policy operations remain unaffected. RBA Governor Michele Bullock noted in the 2023-2024 annual report that, while the RBA’s operational capacity is intact, rebuilding capital over time is a priority. Treasurer support for retaining future profits to restore the bank’s equity has been indicated.
The RBA also recorded an A$8.3 billion loss in underlying earnings, partially offset by a A$4.2 billion gain from changes in its bond and foreign currency valuations.
(Exchange rate: $1 = 1.5097 Australian dollars)
