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RESERVE BANK OF AUSTRALIA

Statement on Monetary Policy – November 2008

List of tables

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Chapters

Table 1: Changes in Monetary Policy

Table 2: Emerging Market Monetary Policy Changes

Table 3: Changes in Global Share Prices

Table 4: Biggest Daily Percentage Changes in S&P 500 since January 1928

Table 5: Changes in US Dollar against Other Currencies

Table 6: Australian Dollar against Selected TWI Currencies

Table 7: Demand and Output

Table 8: National House Prices

Table 9: Sectoral Movement in the ASX 200

Table 10: Intermediaries’ Variable Lending Rates

Table 11: Credit Aggregates

Table 12: Measures of Consumer Prices

Table 13: Median Inflation Expectations

Table 14: Output and Inflation Forecasts

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Boxes

Table A1: Federal Reserve Lending Facilities – Outstandings

Table B1: Amount Available under US Dollar Swap Auction Facilities

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Table 1: Changes in Monetary Policy
  Current level
Per cent		 Most recent
change		 Expectations for
next 6 months
Sources: Bloomberg; Thomson Reuters; central banks
United States 1.00 ↓ Oct 08 ↓ 25 bps
Euro area 3.75 ↓ Oct 08 ↓ 100 bps
Japan 0.30 ↓ Oct 08 no change
United Kingdom 4.50 ↓ Oct 08 ↓ 200 bps
Canada 2.25 ↓ Oct 08 ↓ 75 bps
New Zealand 6.50 ↓ Oct 08 ↓ 150 bps
Sweden 3.75 ↓ Oct 08 ↓ 75 bps
Switzerland 2.50 ↓ Oct 08 ↓ 50 bps
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Table 2: Emerging Market Monetary Policy Changes
  Change since
previous
Statement
Basis points		 Current
level
Per cent
Sources: Bloomberg; central banks
Brazil ↑ 75 13.75
Chile ↑ 100 8.25
China ↓ 81 6.66
Czech Republic ↓ 25 3.50
India ↓ 150 7.50
Indonesia ↑ 50 9.50
Israel ↓ 50 3.50
Hong Kong ↓ 200 1.50
Hungary ↑ 300 11.50
Korea ↓ 75 4.25
Mexico ↑ 25 8.25
Philippines ↑ 25 6.00
Taiwan ↓ 62.5 3.00
Thailand ↑ 25 3.75
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Table 3: Changes in Global Share Prices
Per cent
  Since recent
peak		 Since previous
Statement		 Recent trough
lowest since
Source: Bloomberg
United States
– Dow Jones −35 −20 Apr 03
– S&P 500 −39 −25 Apr 03
– NASDAQ −41 −29 May 03
Euro area
– STOXX −44 −22 Jul 03
United Kingdom
– FTSE −33 −17 Apr 03
Japan
– TOPIX −47 −23 Jan 84
Canada
– TSE 300 −34 −26 Sep 04
Australia
– ASX 200 −36 −13 Nov 04
MSCI Emerging Asia −52 −31 Sep 04
MSCI Latin America −43 −26 Aug 05
MSCI Emerging Europe −58 −44 Nov 03
MSCI World −39 −22 May 03
MSCI World Financials −52 −25 na
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Table 4: Biggest Daily Percentage Changes in S&P 500 since January 1928
Rank Increases Decreases
Change Date Change Date
Source: Bloomberg
1 16.6 15 Mar 33 −20.5 19 Oct 87
2 12.5 30 Oct 29 −12.3 28 Oct 29
3 12.4 6 Oct 31 −10.2 29 Oct 29
4 11.7 21 Sep 32 −9.6 6 Nov 29
5 11.6 13 Oct 08 −9.3 18 Oct 37
6 10.8 28 Oct 08 −9.0 15 Oct 08
7 9.6 5 Sep 39 −8.9 20 Jul 33
8 9.5 20 Apr 33 −8.8 29 Sep 08
9 9.1 21 Oct 87 −8.7 21 Jul 33
10 8.9 14 Nov 29 −8.3 26 Oct 87
11 8.8 3 Aug 32 −8.1 5 Oct 32
12 8.5 8 Oct 31 −8.1 12 Aug 32
13 8.4 11 Feb 32 −7.9 26 Jul 34
14 8.4 13 Feb 32 −7.8 31 May 32
15 8.3 18 Dec 31 –7.6 9 Oct 08
16 8.2 24 Jul 33 −7.4 14 May 40
17 7.5 3 Jun 31 −7.3 24 Sep 31
18 7.5 20 Oct 37 −7.2 12 Sep 32
19 7.5 10 Nov 32 −7.0 15 Jun 33
20 7.4 10 Jun 32 −6.9 27 Oct 97
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Table 5: Changes in US Dollar against Other Currencies
Per cent
  Year-to-date Since previous
Statement
Sources: Bloomberg; Board of Governors of the Federal Reserve System; Thomson Reuters
South Africa 50 30
South Korea 40 25
Australia 34 32
United Kingdom 31 22
New Zealand 31 20
Canada 27 11
Brazil 23 33
Sweden 22 27
Indonesia 21 21
India 21 13
Mexico 19 27
Euro area 13 19
Philippines 10 10
Malaysia 6 7
Thailand 3 4
Singapore 2 6
Switzerland 2 9
Taiwan 1 6
China −8 0
Japan −14 −10
Majors TWI 12 10
Broad TWI 9 10
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Table 6: Australian Dollar against Selected TWI Currencies
Percentage change
  Year to date Since previous
Statement		 Deviation from post-
float average
Sources: RBA; Thomson Reuters
South Africa 10 −2 56
South Korea 3 −7 29
UK −3 −8 −3
New Zealand −4 −10 −7
Canada −7 −16 −15
Sweden −11 −5 0
Indonesia −12 −10 112
Euro area −17 −11 −21
Singapore −25 −20 −20
Taiwan −25 −21 −1
Switzerland −26 −18 −27
US −26 −25 −6
PNG −32 −26 33
China −32 −26 0
Japan −37 −33 −30
TWI −23 −21 −6
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Table 7: Demand and Output
Percentage change
  March
quarter
2008		 June
quarter
2008		 Year to June
quarter
2008
(a) Adjusted for the statistical discrepancy
(b) Contributions to GDP growth
Sources: ABS; RBA
Domestic final demand 1.1 0.9 4.3
GNE(a) 1.3 0.3 4.4
Net exports(b) −0.7 0.0 −1.8
GDP 0.7 0.3 2.7
Non-farm GDP 0.7 0.5 2.5
GDP adjusted for changes in the
terms of trade		 1.0 3.3 6.3
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Table 8: National House Prices
Percentage change
  June
quarter 2008		 September
quarter 2008		 Year to September
quarter 2008
Sources: ABS; APM; RBA; RP Data-Rismark
ABS −0.2 −1.8 2.8
RP Data-Rismark −1.6 −1.6 0.9
APM −1.0 −1.6 1.4
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Table 9: Sectoral Movement in the ASX 200
  Per cent change since Lowest since
End Jul 2008 End 2007
Source: Bloomberg
Resources −32.1 −33.3 January 2007
Financials −7.4 −38.0 August 2004
All other sectors −12.5 −29.9 May 2005
ASX 200 −16.3 −34.2 June 2005
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Table 10: Intermediaries’ Variable Lending Rates
Per cent
  Level at Change since:
End Oct 2008 End Jul 2008 End Jul 2007
(a) Reduction of cash rate on 4 November not included
(b) RBA estimate
Sources: ABS; APRA; RBA
Cash rate(a) 6.00 −1.25 −0.25
Housing loans
Prime-full doc
Banks 7.71 −1.22 0.27
CUBS 7.89 −0.91 0.52
Mortgage originators 8.26 −0.85 0.91
Prime low doc
Banks 8.19 −1.19 0.51
Mortgage originators 8.82 −0.97 1.02
Non-conforming 11.71 0.00 2.09
Personal loans
Margin loans 10.12 −0.43 1.15
Standard credit cards 19.75 0.08 1.96
Low-rate credit cards 13.23 0.34 2.06
Unsecured term loans 14.84 −0.06 2.22
Small business
Term loans
Residentially secured 9.41 −0.69 1.11
Other security 10.01 −0.68 1.12
Overdraft
Residentially secured 10.16 −0.72 1.22
Other security 11.10 −0.68 1.26
Average actual rate(b) 9.46 −0.69 0.82
Large business
Average actual variable rate 8.17 −0.80 0.61
Average actual bill rate(b) 7.52 −0.91 0.43
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Table 11: Credit Aggregates
Average monthly growth, Per cent
  December
quarter 2007		 March
quarter 2008		 June
quarter 2008		 September
quarter 2008
Source: RBA
Total credit 1.3 0.9 0.5 0.6
Household 0.9 0.8 0.6 0.4
– Owner-occupier
housing 0.9 1.0 0.7 0.5
– Investor housing 0.8 0.7 0.6 0.5
– Personal 1.3 0.0 0.0 −0.4
Business 1.8 1.0 0.3 0.9
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Table 12: Measures of Consumer Prices
Percentage change
  Quarterly Year-ended
June
quarter 2008		 September
quarter 2008		 June
quarter 2008		 September
quarter 2008
(a) Volatile items are fruit, vegetables and petrol
Sources: ABS; RBA
CPI 1.5 1.2 4.5 5.0
– Tradables 1.5 0.7 2.9 3.4
– Tradables (ex food and fuel) 1.1 0.1 1.0 1.1
– Non-tradables 1.4 1.6 5.6 6.1
Underlying measures        
Weighted median 1.0 1.3 4.5 4.8
Trimmed mean 1.2 1.2 4.3 4.6
CPI ex volatile items(a) 1.3 1.1 4.2 4.6
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Table 13: Median Inflation Expectations
Per cent
  Year to June 2009 Year to June 2010
May
2008		 August
2008		 November
2008		 August
2008		 November
2008
(a) RBA survey
(b) Workplace Research Centre
Market economists(a) 3.0 3.3 3.4 2.8 2.6
Union officials(b) 4.0 4.0 4.5 3.6 4.0
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Table 14: Output and Inflation Forecasts(a)
Percentage change over year to quarter shown
  June
2008		 Dec
2008		 June
2009		 Dec
2009		 June
2010		 Dec
2010		 June
2011
(a) Actual data to June 2008. Underlying inflation refers to the average of trimmed mean and weighted median inflation. For the forecast period, technical assumptions include A$ at US$0.70, TWI at 57, cash rate at 5.25 per cent, and WTI crude oil price at US$70 per barrel and Tapis crude oil price at US$72 per barrel.
Sources: ABS; RBA
GDP 2.7 1½ 1½ 1¾ 2 2½ 3
Non-farm GDP 2.5 1½ 1 1¾ 2 2½ 3
CPI 4.5 4¼ 3 3½ 3¼ 3 2½
Underlying inflation 4.4 4½ 4 3½ 3¼ 3 2½
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Table A1: Federal Reserve Lending Facilities – Outstandings
US$ billion
  As at 3 Sep 2008 As at 29 Oct 2008 Change
Source: Board of Governors of the Federal Reserve System
Repos 109 80 −29
Discount window 19 111 92
PDCF 0 79 79
TAF 150 301 151
TSLF 116 197 82
AMLF na 96 96
CPFF na 145 145
MMIFF na na na
US$ swap facility 62 442 380
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Table B1: Amount Available under US Dollar Swap Auction Facilities(a)
US$ billion
  As at
19 Dec 2007		 As at
24 Sep 2008		 As at
29 Oct 2008		 Amount
outstanding as
at 29 Oct 2008
(a) Excludes central banks’ direct foreign exchange swaps with counterparties
Source: central banks
European Central Bank 20 110 Unlimited 210
Bank of England – 40 Unlimited 74
Bank of Japan – 60 Unlimited 70
Sveriges Riksbank – 10 30 27
Swiss National Bank 4 27 Unlimited 26
Reserve Bank of Australia – 10 30 18
Danmarks Nationalbank – 5 15 15
Norges Bank – 5 15 3
Bank of Canada – 10 30 0
Banco Central do Brasil – – 30 0
Banco de México – – 30 0
Bank of Korea – – 30 0
Monetary Authority of Singapore – – 30 0
Reserve Bank of New Zealand – – 15 0
Total 24 277 Unlimited 442
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