Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Australia central bank assessing various monetary policy options, A$ slips

share with twitter share with LinkedIn share with facebook
09/22/2020 | 01:13am EDT
Reserve Bank of Australia Governor Philip Lowe speaks at a parliamentary committee hearing in Sydney

Australia's central bank is assessing various monetary policy options including currency market intervention and negative rates to meet its inflation and employment goals, Deputy Governor Guy Debelle said on Tuesday.

The Reserve Bank of Australia (RBA) had slashed interest rates to a record low 0.25% in an emergency meeting in mid-March to backstop the economy from the coronavirus crisis.

It also launched an "unlimited" government bond buying programme and a cheap funding facility for banks. It has held rates since then, saying it would maintain its "highly accommodative settings" as long as required to support the flagging economy.

On Tuesday, Debelle said the board was assessing other policy options "given the outlook for inflation and employment is not consistent with the Bank's objectives over the period ahead.

One option being considered is buying government bonds with maturities beyond three years. The RBA is currently targeting three-year yield at 0.25%.

Foreign exchange intervention was another potential tool, though Debelle said it was not clear whether this would be effective given the Australian dollar was "aligned with fundamentals." [AUD/]

A third option would be to lower the cash rate without taking it into negative territory. And, the final option was negative rates, though Debelle said the empirical evidence on its success was mixed.

The RBA has previously said on multiple occasions that negative rates were "extraordinarily unlikely" in Australia and Debelle reaffirmed that stance.

The Australian dollar <AUD=D3> fell briefly below 72 U.S. cents after the speech but pared some of the losses to last fetch $0.7223.

"The nuance in our view was slightly dovish," RBC economist Su-lin Ong said.

The RBA's easing bias was also reinforced by Debelle's emphasis on a bumpy and uneven recovery and challenging labour market outlook.

"By continuing to highlight other policy measures without committing to any timelines, especially ahead of the upcoming 2020/21 Commonwealth Budget, the RBA is employing maximum flexibility," Ong added.

The Budget is due on Oct.6

"In these uncertain times, that would appear prudent."

By Swati Pandey


Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) 0.31% 0.94033 Delayed Quote.2.84%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) -0.01% 74.606 Delayed Quote.-1.91%
AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) -0.17% 1.06514 Delayed Quote.2.23%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.24% 0.7115 Delayed Quote.1.65%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) -0.07% 1.82925 Delayed Quote.-3.37%
share with twitter share with LinkedIn share with facebook
Latest news "Economy & Forex"
12:54pU.S. new home sales drop; record low mortgage rates underpinning demand
RE
12:40pU S DEPARTMENT OF TREASURY : Treasury Prohibits Cuban Military from Processing Remittance-Related Transactions
PU
12:39pGeneral Catalyst-backed blank-check firm looks to raise up to $500 mln in IPO
RE
12:38pMicrosoft quietly prepares to avoid spotlight under Biden
RE
12:38pHuawei cfo meng wanzhou arrives in canada courtroom for witness testimony hearings as part of u.s. extradition case
RE
12:35pAll Tenorshare Software is now Compatible with iPhone 12 and 12 Pro
SE
12:35pBANK OF SOUTH SUDAN : Reports of the Auditor General and the financial statements for the year ended December 2015
PU
12:33pINSTANT VIEW : S&P 500 down more than 2% amid stimulus deadlock
RE
12:25pGLOBAL MARKETS : Stocks slide on surging virus cases, stimulus doubts; dollar rises
RE
12:25pWALL STREET STOCK EXCHANGE : Wall Street extends slide on virus worries, elusive stimulus deal
RE
Latest news "Economy & Forex"