Economics
Australia QE Program Shows ‘Signs of Success’ in First Week
- Funding stress indicators eased as bank-bill rates came down
- Key test looms as government to resume bond sales next week
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Australia’s central bank is one week into buying government bonds in order to lower interest rates across the economy and the early verdict: so far so good.
The Reserve Bank of Australia has bought A$21 billion of securities ($12.8 billion) since last Friday, after setting an objective for three-year government bond yields of 0.25%, the same as the cash rate. That yield fell today to just 1.2 basis points above the target, while signs of funding stress in money markets have eased.