Australian Financial Review
"My main memory of that time is that I didn't sleep for two months", recalls RBA deputy governor Guy Debelle, who in 2008 was responsible for running the central bank's financial market operations.
At the time, most assumed the RBA's intervention in foreign currency markets was aimed at putting the brakes on the Australian dollar's precipitous decline. Ten years on, Debelle reveals this was not the case. Instead, the RBA wanted to narrow the yawning gap between the cost of buying and selling Australian dollars.
The tumbling Australian dollar "was good, we wanted the exchange rate to go down. It was just there was no liquidity in the market", he says. "It wasn't that people were shorting the currency and trying to drive it down. It was just that no one was wanting to make a market on any side, and do any risk intermediation, and so we did." Read the full story at www.afr.com/x/h14wcs 📰: Karen Maley
📊: Angelo Vlachoulis
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