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

CBA economists see Australia jobless rate at 5.75% by end-2021

A very bold set of forecasts from CBA economists who have just upgraded their forecasts for Australian economist.

...

Published on : 13 Nov 2020 , 10:20 AM
RBA buys 2024 bond at 0.1142% weighted avg yield; 2030 bond at 0.9133%

The RBA bought A$2.0B of April 2024 government bond at a cut-off yield of 0.1075% and weighted average yield of 0.114...

Published on : 12 Nov 2020 , 06:26 PM
RBA buying A$2B of April 2024 plus A$2B QE

The RBA is buying A$2 billion of April 2024 government bonds under the yield target policy, in addition to its purcha...

Published on : 12 Nov 2020 , 11:24 AM
RBA may buy 3-year government bonds again

Three-year yield on Australian government bonds are currently above the 0.10% target, raising speculation on whether...

Published on : 12 Nov 2020 , 10:51 AM
Headlines from the RBNZ’s November MPS on FLP:

Headlines from the RBNZ’s November MPS on FLP:

-Plan to implement Funding for Lending Programme in ea...

Published on : 11 Nov 2020 , 12:09 PM
RBA buying semis in March 2025 to May 2028 maturity

The RBA is buying A$1.0 billion semis today under the A$100 billion bond-buying program. 

The purchase...

Published on : 11 Nov 2020 , 11:32 AM
Results of RBA's Bond-buying Auction Monday

Results of the RBA's bond-buying auction Monday, consisting of A$1.5 billion under 3-year yield target and A$2.0...

Published on : 09 Nov 2020 , 03:54 PM
RBA buying total A$3.5B under 3-yr target, QE

The RBA is buying A$3.5 billion of government bonds today, with A$1.5 billion as part of its 3-year yield target, and...

Published on : 09 Nov 2020 , 11:33 AM
Headline from RBA Nov Statement on MonPol

RBA Not Contemplating Further Reduction In Interest Rates
RBA: Focus Will Be QE Program, Prepared To Buy More...

Published on : 06 Nov 2020 , 11:34 AM
RBA buying A$2B of Nov 2028-May 2032 at 1st QE

The RBA is buying A$2 billion of November 2028 to May 2032 government bonds (excluding December 2030 bonds) as p...

Published on : 05 Nov 2020 , 11:21 AM