By James Glynn
SYDNEY–The Reserve Bank of Australia launched a strident defense of its quantitative easing program on Tuesday, telling financial markets it remains committed to keeping government bond yields low to support the economy, and will use the extensive firepower at its command to achieve its goals if required.
“The Bank is prepared to make further adjustments to its purchases in response to market conditions… the Bank is prepared to do more (QE) if that is necessary,” R(BA) Governor Philip Lowe said in a statement after the central bank’s March policy meeting.
“The Board remains committed to maintaining highly supportive monetary conditions until its goals are achieved… The Board does not expect these conditions to be met until 2024 at the earliest,” he added.
The comments come as improving economic fundamentals and the rollout of Covid-19 vaccines put upward pressure on government bond yields globally, testing the QE programs of major central banks.
The R(BA) announced a $100 billion Australian dollar (US$77.72 billion) government bond-buying program in November, and rolled out an extension of equal size in February that will run until September.
Economic growth data due for release on Wednesday are expected to show the economy was hit hard in 2020 by the Covid-19 pandemic, but staged a remarkable recovery in the second half of the year.
Write to James Glynn at james.glynn@Fintech Zoom.com
(END) Dow Jones Newswires
March 01, 2021 23:08 ET (04:08 GMT)
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