RBA's Debelle: Cross currency basis may not be sign of stress - Reuters

Reserve Bank of Australia (RBA) deputy governor Guy Debelle crossed the wires, via Reuters, suggesting that an increase in the cross currency basis may not be a sign of stress and can be consistent with functioning markets.

Key quotes (via Reuters):

• More comfortable with the idea that increase in cross currency basis is not always a sign of market stress
• Increase in the basis can be consistent with functioning markets
• Wouldn't lose sleep over higher basis the "way that I literally lost sleep over it in 2008"
• RBA's return enhancement offered by the basis is "highly beneficial"
• RBA can swap a$ into yen for domestic liquidity management, can earn "substantial return" by swapping various reserve currencies it holds in yen