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Australia Central Bank Faces Taper Quandary as Peers on Hold

  • Local economy in V-shape recovery as hiring, sentiment surge
  • With policy loose globally, pullback would see currency soar
Inside the Reserve Bank of Australia After Record Sovereign Sale
Photographer: David Gray/Bloomberg
Updated on

Australia only recently started its quantitative-easing program, yet the key question already confronting the central bank is when and how to taper bond purchases given the strong economic recovery.

The Reserve Bank of Australia is set to keep its key interest rate and three-year bond yield target at 0.10% Tuesday, when the board holds its first meeting of the year. It’s halfway through a six-month, A$100 billion ($76.3 billion) bond-buying program, and also is running a bank-lending facility as part of efforts to compress borrowing costs and contain the local currency.