Business
The RBA created $160 billion out of thin air: What it means for you – Yahoo Finance Australia
The Reserve Bank has performed a monetary magic trick. But here’s why it’s no miracle.
Image: Getty
The Reserve Bank is perhaps the only Australian institution that can perform a magic trick.
At its discretion, which governor Philip Lowe reminded the National Press Club last week he takes very seriously, the RBA can create money out of thin air.
As the coronavirus pandemic reached a climax, and the economy went into a deep recession, it became clear extraordinary monetary policy would be needed.
The central bank took the decision to print money.
But long gone are the days when the…
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