Reserve Bank reports record $40bn loss on government bonds purchased during Covid pandemic

The Reserve Bank of Australia joined the Morrison government’s efforts to pump money into the economy during the Covid pandemic. Photograph: Lisa Maree Williams/Getty Images

The Australian Reserve Bank has reported a record loss of almost $37bn for the 2021-22 year after accounting for the changed valuation of the huge bond purchases amassed during the Covid pandemic.

The losses, which won’t be realised unless the central bank sells the bonds before they mature, won’t affect its operations. But the consequence for the federal budget is the likelihood the RBA won’t pay the government dividends for years until its current negative equity of about $12.4bn is restored and built up further.