Here is how far AUD would fall if the RBA introduced Quantitative Easing (QE) in Australia

Author: Eamonn Sheridan | Category: Central Banks

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%. 

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