Penelope Smith, Head of International Department at Reserve Bank of Australia, underscored the remarkable decline in Australia’s net foreign liabilities as a percentage of GDP during the recently concluded CFA Societies 2023 Australian Investment Conference in Sydney. This decline is attributed to a surge in national saving, current account surpluses since 2019, and valuation effects from fluctuating interest and global equity rates. With robust support from trade surpluses and the Superannuation Guarantee enhancing savings, Smith said Australia's liability position poses no concern. The country's strong institutional mechanisms, the ability to trade debt in domestic currency, and a strategic foreign exchange hedging approach, rooted in the decision to float the exchange rate 40 years ago, have all contributed to its resilient economic standing, she added.
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