RBA QE Would be About Lowering Exchange Rate

By Sophia Rodrigues

Published On 09 Aug 2019 , 11:19 AM

I've spent a bit of time researching whether the RBA will do QE, at what point they will do it, and in what form that would be. I always believed QE will happen well before the cash rate falls to zero, and I think Gov. Lowe hinted at this at the Parliamentary testimony today. That means we might see QE after two more cash rate cuts to 0.5%. The RBA is likely to buy government securities with the main aim of bringing down their yields, so foreigners (who hold a large portion of these) will sell. The main impact would be via exchange rate, and that's exactly what the RBA would want. The economy needs a lower exchange rate more than it needs lower interest rates. And this is the best way to try and achieve it (Time will tell how effective it might be). The other option is intervention in the forex market. Will RBA consider it at some point? I will not discount it.

LATEST SNIPPETS

Full Title of RBA Kent's Speech Next Week

The full title of RBA assistant governor Christopher Kent's speech next week is, "From QE to QT - The next p...

Published on : 20 May 2022 , 10:00 AM
Australia's unemployment rate at 3.9% in April

The jobless rate was at 3.9% in April, following a revised 3.9% rate in March (from 4.0%), data from Australian Burea...

Published on : 19 May 2022 , 11:46 AM
RBA Governor and Deputy Governor -- Some fun facts

I don't think there's as much commonality between a governor and deputy governor as it is between RBA's G...

Published on : 10 Mar 2022 , 05:53 PM
ANZ NZ Sees RBNZ hiking 50bps in both April and May

Economists at ANZ New Zealand have revised their call for the RBNZ OCR, now expecting 50bps hike at each of the meeti...

Published on : 08 Mar 2022 , 09:11 AM
Treasury to release MYEFO on Dec 16

There is greater interest in the Mid-Year Economic and Fiscal Outlook this year given the slow pace of government bor...

Published on : 10 Dec 2021 , 12:00 AM
No "reasonable" seller of April 2024 bond at RBA's QE

The RBA's bond purchase program included the April 2024 government bond for the first time since it abandoned the...

Published on : 08 Nov 2021 , 06:39 PM
A Few Things To Consider On RBA’s 10bps April 2024 Bond Before 11:15 AM

(This snipped was first published on Friday, October 29 at 9:37 AM as email to premium subscribers)

The Res...

Published on : 29 Oct 2021 , 04:37 PM
Will RBA Buy April 2024 Bond Today?

(This snipped was first published on October 28 at 1039 AM)

Australia’s bond market is once again tes...

Published on : 29 Oct 2021 , 04:36 PM
NAB Says RBA QE to End February 2022

National Australia Bank economists expect the RBA to end its bond purchase program (QE) by February, making it the fi...

Published on : 29 Oct 2021 , 02:39 PM
Australia's core CPI in RBA target band for first time since 2015

Australia's Q3 CPI shows core inflation rising into RBA's target band for the first time since 2015 (and impo...

Published on : 27 Oct 2021 , 11:39 AM