We have experienced a global pandemic, the biggest peacetime contraction in the Australian economy in nearly a hundred years and extraordinary monetary and fiscal policy measures. This all means that many of the challenges we face today were hardly imaginable just six months ago.
In normal times, central bankers tend to place more emphasis on interest rates than on monetary and credit measures. Nevertheless, the growth rates of monetary and credit aggregates do appear to have some explanatory power regarding the future evolution of spending and inflation, and are thus useful additional indicators of liquidity.