The Reserve Bank of Australia has published its:
Review of the Yield Target
(link to the full text)
Headlines via Reuters:
RBA says:
- Any use of a yield target would require close attention to the lessons learned from this experience,
- Says yield target successfully reinforced the bank's forward guidance about the cash rate
- But its effectiveness as a monetary policy tool waned as market participants reassessed their views of the outlook for the cash rate
- While a bond purchase program offers more flexibility than a yield target, it carries other risks
- Exit experience caused some reputational damage to the bank.
- Board has agreed to strengthen the way it considers the full range of scenarios when making policy decisions
- Now that the board has more experience with bond purchase programs, it is likely that, in the future, bond purchases would be preferred to a bond yield target
