BIS Review 73/2008  1  •  First, monetary or macroeconomic liquidity refers to a generally accepted medium of exchange. Such liquidity comprises central bank money and more broadly defined monetary aggregates. •  Second, market liquidity means the ability to trade an asset quickly and at low costs with little impact on its price.
At this stage for Australia, though, prospects seem to be for acceptable inflation performance over the coming year or so. I will leave further elaboration of the Bank’s view of the outlook, since the Governor will do this on Friday. Conclusion Overall, this is a pretty positive picture for the Australian economy. “Beautiful one day, perfect the next” would perhaps be an overstatement.