Economics
Australian Central Bank Holds Fire, Braces for Economic Hit
- RBA broadens collateral eligible in its open market operations
- Australia needs to ramp up issuance as rest of world does same
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Australia’s central bank kept the interest rate and yield objective unchanged Tuesday, while broadening securities eligible for its daily liquidity operations to assist the functioning of capital markets and keep rates down across the economy.
Reserve Bank of Australia Governor Philip Lowe maintained both the cash rate and three-year bond yield target at 0.25%, as expected by economists and money markets. Since launching unconventional policy in March, the bank has purchased A$50.7 billion ($32.7 billion) of securities that has brought the short-end of the government yield curve down to target.