Economics
Reserve Bank Deputy Says Rate Cuts Are Aiding Australia’s Economy
- RBA would target bond yields rather than buy large quantities
- Fiscal-monetary policy mix will help navigate the virus threat
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The Australian central bank’s No. 2 official said interest-rate cuts are supporting the economy by ensuring stronger demand, while acknowledging the supply-side impact of the coronavirus is impervious to monetary policy.
Lower rates “will provide more disposable income to the household sector and those businesses with debt,” Reserve Bank Deputy Governor Guy Debelle said in a speech in Sydney on Wednesday. “They may not spend it straight away, but it brings forward the day when they will be comfortable with their balance sheets and resume a normal pattern of spending.”