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Speaking on the international outlook in New York, Reserve Bank
of Australia (RBA) Governor Glenn Stevens also said central
banks globally were reaching the limits of what they could
achieve through monetary policy.
"Surely diminishing returns are setting in," Stevens said of
ever more exotic policy steps around the world.
"Maybe this has something to do with market confidence being
easily rattled," he added "There was a hint in the recent
episode of the feeling that central banks didn't have much left
they could do, if things got worse."
Still, Stevens argued the wild swings seen in markets were an
over reaction to signs of a softening in world economic growth.
The latest rebound seen in many markets suggested that it was
not the start of a major financial shock that could derail
growth further, said Stevens.
The RBA in March cited the market turmoil as one reason it might
consider cutting Australian interest rates, but has since
dropped that condition. Stevens did not touch on domestic policy
or the economy in his written remarks.
(Reporting by Wayne Cole; Editing by Shri Navaratnam)
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