Market expectations are that the Reserve Bank of Australia will postpone its planned taper of QE. These expectations are not unanimous though.
Yesterday I posted ANZ's view, tipping a delay. Adding a little more now from analysts at the bank. They say that the prospect of a weaker starting point for the economy, and a greater risks on the outlook for next year, "support a policy response by the RBA". ANZ do say though they think a "central scenario of a strong rebound next year is intact."
The background to this is the RBA announced in July it would move to a "flexible", scaled-back bond-buying program
- dropping its weekly purchase rate from AUD 5 bn to 4bn
- its current AUD200bn government securities buying program only has 4bn until completion
The Bank said at its July meeting though, according to the minutes, the delta variant could be a game-changer if it resulted in a significant setback to growth. And, of course, since July lockdowns in Australia's two largest cities and states have been ongoing ... with no prospect of exit for weeks (or months) to come.
Also:
- CBA expect a reversal of the taper decision
- RBA monetary policy meeting next week - sneak peek preview
