Comments by RBA governor, Philip Lowe
- "If we need to do more, we can and we will" on bond purchases
- RBA is "not out of fire power" after latest easing measures today
- Negative policy rate is "extraordinarily unlikely"
- Little to be gained from lowering cash rate into negative territory
- The board considered targeting longer yield but decided against it
- Addressing the high unemployment rate as a national priority
- Full speech
This is largely to reassure the market that the RBA still has some ammunition left in its pocket, after having lowered the cash rate earlier to 0.10% - pretty much as good as 0%.
For now, NIRP seems to be off the table but if the economic situation worsens or if the virus crisis extends for much longer than anticipated, it may possibly be an option - as we have seen to be the case with the BOE.
But if anything else, more QE and yield curve control are likely to follow first.
AUD/USD just off earlier lows at 0.7038 now but keeping below its 100-hour moving average near 0.7048 as sellers try to keep a more bearish near-term bias.
