Central Bank of Australia Starts QE Reduction on Schedule-Interest Rate and Yield Targets Deferred-Bloomberg

The Reserve Bank of Australia (Central Bank) confirmed on the 3rd that it will taper its bond purchase program as planned. The official cash rate guidance target, which is the policy interest rate, has been left unchanged at a record low of 0.10%, and the yield target for 3-year government bonds has also been maintained at around 0.10%.

For the Quantitative Easing (QE) program, even after the second round of A $ 100 billion bond purchases ended in early September, 40 a week, less than the current A $ 5 billion a week. It has been confirmed that it will continue at a pace of A $ 100 million until at least mid-November. The deferment of the policy rate was expected by all 26 economists surveyed by Bloomberg.

“In our experience, the economy will recover sharply if the spread of the new coronavirus is curbed. The economy is benefiting from significant additional policy support and the vaccination program is recovering,” the Bank of Australia said in a statement. Will help. ” The Australian dollar rose following the release of the statement.

The decision to stick to the tapering schedule that surprised the market has given a lot of support to the economy as the Australian dollar has fallen about 6% in the last five months and yields have fallen, to curb the spread of the new coronavirus. It seems to be a sign of the basic confidence of policymakers that if the restrictions are lifted, the economy is likely to recover at a fast pace.

The statement states, “The Policy Board will maintain a flexible approach to the pace of bond purchases. We will continue to review the program, taking into account economic and medical conditions and their impact on progress towards achieving full employment and inflation targets.” I explained.

“We will not raise the cash rate until real inflation continues to stay within the 2-3% target range. The central economic scenario is that this condition will not be met before 2024.” “In order to meet the conditions, the labor market needs to be tight enough to generate wage growth that is considerably higher than at present.”

Original title:RBA Sticks With Taper Plan, Will Maintain Flexible Approach、RBA Keeps Rate Unchanged at 0.10%; Decision History、RBA’s Lowe Keeps Benchmark Interest Rate at 0.10% (Full Text)(抜粋)

(Update with the view that it shows confidence in the central bank’s economic situation)