The injection of a $8.8 billion by the federal government to boost the Reserve Bank’s safety buffer will mean an earlier resumption of dividends from the central bank.
Governor Glenn Stevens says without that money, to fill a gap left by the high Australian dollar running down reserves, it would have taken many years to rebuild capital.
“This results in a stronger balance sheet on average, and makes it likely that a regular flow of dividends to the Commonwealth can be resumed at a much earlier date than would otherwise have been the case,” says Stevens.
At last report the Reserve has $11.3 billion in cash reserves.
Stevens also says there’s evidence of a lift in sentiment in the business community over the last two months.
“A lessening of political uncertainty has no doubt helped this,” he told Citi’s 5th Annual Australian and New Zealand Investment Conference in Sydney.
The full speech is here.
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