What happened
The Reserve Bank of Australia reported an $11.3 billion loss for the 2025-26 financial year, driven by an $8.5 billion valuation loss on government bonds purchased during the COVID-19 pandemic. Higher global interest rates and a stronger Australian dollar reduced the portfolio's value. Consequently, the central bank remains in negative equity, while Governor Michele Bullock earned $1.2 million in total remuneration over the period.
Why it matters here
While the RBA cannot go bankrupt because it issues currency, holding negative equity halts all dividend transfers to the federal government. The Commonwealth has received no RBA dividends for five years, increasing reliance on taxation and government bond issuance to fund federal expenditure during a period of elevated national debt and economic slowing.
What to watch
The Reserve Bank's ongoing balance sheet updates and official Commonwealth budget statements for revised structural projections regarding the resumption of central bank dividend distributions.
Source
youtube.com