Australian Debt Market : Speech

2. Jordan, Bradford D., Susan D. Jordan, and David R. Kuipers. "The Mispricing of    Callable U.S. Treasury Bonds: A Closer Look." Journal of Futures Markets 18.1 (1998): 35-51. Web.

In the current year, there is uncertainty of the economic performance globally and the condition on housing market continues to vary over the country. Therefore, RBA recently decided to keep the interest rate at 1.5 percent – which is unchanged for several months – to maintain the sustainable growth and achieve the inflation target (RBA, 2017).

inflation eventually moves back to the 2% benchmark.1 The Fed must act carefully in 2016 to

Governments around the world issue debt to help finance their general operations, including current expenses such as wages for government employees, and investments in long-term assets such as infrastructure and education. As countries capital markets develop, an increasing number of sovereigns have been able to issue both external debts (denominated in hard currency, often the U.S. dollar) as well as local debt (issued in the sovereign’s own currency).

With the latest inflation result showing inflation to be around the mid band target of the 2-3% target, no immediate cash rate decisions need to be made to control inflation. The cash rate is closely related to the monetary policy. As the inflation target helps the RBA achieve its three objectives of monetary policy, and the cash rate ultimately influences the level of inflation in the economy, the cash rate and monetary policy can be seen to be closely related. The three objectives of monetary policy are; maintaining price stability, full employment and economic prosperity and welfare of the Australian people (Reserve Bank of Australia, 2013). The objectives of monetary policy will also be covered in this essay and how the current will

Nevertheless the fact cannot be undermined that in more recent times, the issuances of bonds and securities in emerging markets have seen a surge in financial capital. USA has played a major role in financial capital market deepening both within the country and outside the country i.e. the world financial capital assets was $56.1 trillion for the country that accounts for nearly one-third of the global total.

The supply of general gross debt for advanced economies increased significantly over the past years compared to that of emerging economies, especially after the onset of the financial crisis as illustrated in the graph below:

According to the most recent monetary policy, which is released on 04 August 2015 by Glenn Stevens, l will investigate all the possible effects in economy those are influenced by the change of monetary policy. After their recent meeting, the Board made a wise decision and maintained the interest rate at 2.0 per cent. And refer to the earlier announcements this year; we all know that the rates have been changed twice in 2015, because RBA decided to support the economy, and wanted to reduce the rise in unemployment. But there are possible growing risks from lower rates.

Australia’s inflation rate has remained within the RBA’s target band of 2-3% for the past two decades, averaging 2.7% between 1994 and 2014, slightly above the OECD average of 2%. The RBA has achieved price stability through the use of monetary policy to control cost-push and demand-pull pressures. Globalization and reduced protectionism have exposed the Australian economy to increased levels of competition, putting downward

Inflation has been reduced in the past five years, with it peaking at 2.45% in 2011. Since then, it has drastically decreased, reaching a rate of 0.30% deflation in 2014. This can be

Some bank loan agreements may have covenants or terms that may be more favorable to loan agreements over existing bonds. In some cases banks may be able to effectively prioritize repayment of a bank loan over existing bonds. Certain terms may increase the liquidity risk of the government based on these alternative financing agreements. Terms of loan agreements need to be disclosed to assess and analyze a government’s liquidity position. This is especially the case under acceleration clauses, cross-default provisions, and debt reserve requirements.

Organisations and governments across the world have become increasingly dependent on debt over the last few decades. Goods and services are provided on credit and debt is granted to organisations and governments by lenders in different parts of the world. The providers of credit facilities, also known as investors, require a certain level of comfort that the security issuer will be able to repay the debt.

Organisations and governments across the world have become increasingly dependent on debt over the last few decades. Goods and services are provided on credit and debt is granted to organisations and governments by lenders in different parts of the world. The providers of credit facilities, also known as investors, require a certain level of comfort that the security issuer will be able to repay the debt.

In addition, the supply of this high quality collateral has reduced because of the asset purchase plan of the Federal Reserve. Totally, high-quality collateralizes the availability of repo, low risk securities may diminish over the near term, resulting in a shift towards lower-quality, higher risk collateral for longer terms. We might see the development of alternative interest bearing investment products as a result of this potential shortfall in repo inventory.

With the increasing trend of issuing treasury bills to finance the budget deficit and to sterilize foreign capital inflow, and with the portfolio shift from foreign currency deposits to LE deposits, and interest payments in domestic debt grew rapidly.