Review of RBA suggests board lose ability to set interest rates
The biggest shake up of economic governance in Australia in decades follows a year of consecutive interest rate hikes
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The RBA board is likely to be stripped of control to set the cash rate, under review recommendations expected to be announced today.
Treasurer Jim Chalmers last year called for a review of the RBA board’s decision making processes, which have seen 10 consecutive interest rate rises since May 2022, as well as the way information is conveyed to the public.
The independent review undertaken by three experts is understood to have recommended setting up a Monetary Policy Board to set interest rates and a separate Governance Board in a shake up described as the biggest in a generation. Rather than focusing on interest rates, the report has said the RBA board should instead look to the operation of the bank as its main purpose. Meetings to discuss the cash rate will be reduced from 11 per year (there is no meeting in January) to eight. The report also recommended that the governor of the RBA appear at a press conference after each meeting the better explain its decisions to the public.
Deloitte Access Economics partner Chris Richardson has backed the decision. His support follows comments in a Deloitte report earlier this week describing recent interest rate rises as ‘unnecessary’, as they placed further pressure on mortgage holders.
The RBA Board has repeatedly referenced high inflation as its reasoning for continuing to increase the cash rate, which lead author and Deloitte Access Economics Partner Stephen Smith said had left the Australian economy ‘finely poised’.
The decision to shift decision making from the RBA board to a separate board is in line with the modus operandi of other central banks around the world, including the UK and Canada.
The recommendations follow a tough year for mortgage holders, which have seen rates rise by 3.5 percent since April 2022. This is despite RBA governor Philip Lowe telling borrowers in 2021 that rates would remain low until ‘at least 2024’.
Prime Minister Anthony Albanese has called for bipartisan support for the recommendations.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Saudi Arabia ranked first among countries for the non-oil exports of national origin with BD201 million (22%)
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Bahrain’s non-oil exports of national origin decreased by 6% to BD894 million ($2.37 billion) in Q2 2024 compared to the same period in 2023. The top 10 countries accounted for 64% of the total export value.
According to the Information & eGovernment Authority (iGA) in its Q2 2024 Foreign Trade report, Saudi Arabia was the leading destination for these exports, totaling BD201 million (22%). The US followed with BD75 million (8.4%), and the UAE with BD73 million (8.2%).
Unwrought aluminum alloys were the top exported product in Q2 2024, amounting to BD267 million (30%), followed by agglomerated iron ores and concentrates alloyed at BD159 million (18%) and non-alloyed aluminum wire at BD49 million (5%).
Non-oil re-exports
Non-oil re-exports increased by 4% to reach BD206 million during Q2 2024, compared to BD198 million for same quarter in 2023. The top 10 countries accounted for 86% of the re-exported value. The UAE ranked first with BD58 million (28%) followed by Saudi Arabia with BD39 million (19%) and UK with BD17 million (8%).
As per the report, turbo-jets worth BD65 million (32%) were the top product re-exported from Bahrain, followed by private cars with BD11 million (5%) and four-wheel drive with BD9 million (4%).
The value of non-oil imports has decreased by 4% reaching to BD1.41 billion in Q2 2024 in comparison with BD1.47 billion for same quarter in 2023. The top 10 countries for imports recorded 68% of the total value of imports.
China Bahrain’s biggest importer
China ranked first for imports to Bahrain, with a total of BD191 million (14%), followed by Brazil with BD157 million (11%) and Australia with BD112 million (8%).
Non-agglomerated iron ores and concentrates were the top product imported to Bahrain worth BD200 million (14%), followed by other aluminum oxide with BD101 million (7%) and parts for aircraft engines with BD41 million (3%).
As for the trade balance, which represents the difference between exports and imports, the deficit logged was BD310 million in Q2 2024 compared to BD322 million in Q2 2023.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
