CBA have written a note exploring the potential for Reserve Bank of Australia QE.
Before I get to the major point of the headline, the preamble from CBA is worth being of:
- we doubt that the RBA will introduce QE-Aust in this economic cycle
I bolded that bit, yeah its not on the horizon.
However …
- QE ... could be used … if official interest rates are near the lower bound and other policy options have been exhausted
CBA discuss various impacts. This (in very summarised form) specifically on the Australian dollar:
- 'announcement effect' of QE-Aust would indeed place downward pressure on the AUD/USD
- impact on AUD/USD would depend on the economic climate at the time
- We would anticipate the net impact on AUD/USD might be a depreciation of some 2% to 5%.
