The Reserve Bank of Australia is $20 billion in the red after posting its fourth consecutive yearly loss, and asked Treasurer Jim Chalmers not to pull any money out of the central bank for at least a decade to help repair its tattered balance sheet.
A $4.2-billion shortfall revealed in the RBA’s 2023-24 annual report on Friday takes the central bank’s cumulative losses stemming from extraordinary stimulus measures handed out during the pandemic to $51.2 billion.
“The loss reflects the fact that returns on most of our assets were fixed at the low rates prevailing in 2020 and 2021, but the cost of our liabilities rose with the cash rate target,” governor Michele Bullock said in the report.
It showed Ms Bullock received $1.26 million in remuneration last financial year, which included 2½ months when she was deputy governor to Philip Lowe.
The RBA lent out $188 billion to the banks during the pandemic at rates as low as 0.1 per cent as part of the three-year term funding facility. But the RBA now pays those same commercial banks a much higher floating rate of 4.25 per cent on $232 billion of deposits, meaning the central bank is losing the difference between the lending rate and deposit rate.