Comments by RBA governor, Philip Lowe
- RBA doing all it can to lower funding costs, support supply of credit to businesses
- RBA will not be buying bonds directly from the government
- May take some time for yields to fall from current level to 25 bps
- Expects yield target to be removed before raising the cash rate
- Expects a recovery once the virus is contained
- Also expecting significant job losses as the virus fallout hits
- Will maintain current setting of rates until a strong recovery is in place
Well, as optimistic as he sounds, there is no easy escape from QE and zero/negative rates. Just ask the ECB and BOJ how they are doing and you'd know.
So far, he's not hinting that the RBA will go full-scale on bond purchases and rather they'd be selective on particular points on the yield curve. I don't think the market can take too much heart in that but again, this is merely putting plaster on what is a breaking dam.
AUD/USD continues to trade weaker at 0.5570 currently, down by 3.5% on the day.
