Home News RBA: Brexit has minimal impact on Asia, Australia

RBA: Brexit has minimal impact on Asia, Australia

Font size :
Despite the financial turmoil unleashed by the Brexit vote, officials from the Treasury and the Reserve Bank of Australia assured everyone that the economic impact is muted in Asia, where Australia's fortunes are more closely aligned. However, officials acknowledged the risk of financial market contagion and the prospect of ongoing volatility.

"From our point of view, this is a much smaller shock than when Lehman's fell over," one source said.

The Reserve Bank is still seen to have the capacity to support the economy and household spending through additional official interest rate cuts. But with fears of financial contagion, Australia's regulators have taken steps since the 2008 global financial crisis to bolster capital buffers at the big lenders, with the banks themselves having secured enough wholesale mortgage funding to weather the post-Brexit market turmoil.

According to Reserve Bank board member John Edwards, UK's decision would be borne largely by the British and not the rest of the world.

"The UK is not a sufficiently large economy that a setback to growth there will have much influence elsewhere," he said. "It is many, many years since our trade links to the UK were important to our prosperity."

He also expects the volatility to diminish in the coming weeks. "Now that the referendum outcome is clear, there is not much to sustain the volatility," Edwards said.

The real impact of the Brexit vote will depend on the coming weeks as its effect on global commodity prices, the Australian dollar, and the 'animal spirits' of investors and savers will be made known.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

House prices return to more affordable levels in mining towns House prices return to more affordable levels in mining towns

While the end of the mining boom has had a negative impact on property prices, homes in the region have become more affordable Read more

Borrowers should anticipate a possible rate hike Borrowers should anticipate a possible rate hike Some experts advise borrowers to look for a fixed loan that allows extra repayments so that they can whittle down the balance sooner ... Read more

Why choosing the right mortgage is hard for first-home buyers Why choosing the right mortgage is hard for first-home buyers Many feel overwhelmed by the sheer range of products and interest rates on offer, a new survey reveals ... Read more

Mortgage applications drop in second quarter Mortgage applications drop in second quarter This marks the “beginning” of a downward trend, says Equifax executive ... Read more

More mortgage news and articles

Sponsored Links

Thursday, Jul 27, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords