VCE Stuff > VCE Economics
Exchange Rate
AppleThief:
--- Quote from: AppleXY on September 29, 2008, 08:51:27 am ---- The RBA has injected mass amounts of cash into the economy (in particular, in banking) which decreases the the AUD index.
--- End quote ---
Why did they do that? Wasn't there a 21 billion dollar budget surplus designed to take money out of society?
(This is from someone who doesn't know much about economics, so sorry if this question is silly)
costargh:
I think it was to try and allay fears that there would not be enough credit availableto meet demand by businesses and households??? :S
marbs:
I think they know that the US, European and Japanese Market crisis, will have a serious effect on confidence, and willingness to invest, so they wanted to kickstart the economy, after it was posting lows.
I think Australia injected 2.8 billion or something
Japan over 21 billion
and US is planning to inject $700 Billion (US), added to that tax cuts (?).... this shows the seriousness and how what Australian is going through is nothing, and we are relatively stable.
costargh:
--- Quote from: marbs on October 02, 2008, 10:02:52 pm ---and US is planning to inject $700 Billion (US), added to that tax cuts (?).... this shows the seriousness and how what Australian is going through is nothing, and we are relatively stable.
--- End quote ---
Isn't this totally differnt? :S
Isn't the US bailout just the US government buying mortgage related assets from the bank while the Australian cash injection ... (actually to be honest I dont know anything aboiut the Australian cash injection, what it entails and what it means...) explain?
AppleXY:
They injected mass amount of cash to keep the markets liquid and to stimulate credit competition. Also the government bought A-grade bonds which is also designed to stimulate competition in the financial services sector.
The revised TARP (troubled assets relief plan) [around $750 bn, can't exactly remember] includes sweetners such as tax cuts and increased insurance from the FDIC (which secures deposits worth upto $100,000 now to $250,000) and others. It's been approved in congress but has to be approved by the house of the representatives.
For the representing the value of the Australia dollar;
As exchange rate is the value of one currency against another there's no "absolute" value for it, only "relative" values for it. It's mainly measured against the United States Dollar (AUD/USD) or the TWI (Trade Weighted Index) which is an index that measures the value of our currency compared to a basket of currencies of our trading partners.
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