The Reserve Bank of Australia cut the cash rate at its first meeting in March, another cut now

  • Two 25bp cuts in March

The Reserve Bank of Australia says its targeting yield on 3 year bonds at 0.25%

Summary Headlines via Reuters

  • to adopt target on 3-yr govt bond of around 0.25 pct
  • says a term funding facility for the banking system, with particular support for credit to small and medium-sized businesses
  • says exchange settlement balances at the reserve bank will be remunerated at 10 basis points, rather than zero as would have been the case under the previous arrangements
  • to buy govt bonds in secondary market across yld curve ... says purchases will commence on friday
  • says Australia's financial system is resilient and well placed to deal with the effects of the coronavirus
  • says working closely with the other financial regulators and the australian government to help ensure that Australia's financial markets continue to operate effectively
  • says the functioning of major government bond markets has been impaired
  • says at some point virus will be contained and economy will recover
  • says will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2-3 per cent target band
  • says three-year funding facility to authorised deposit-taking institutions at a fixed rate of 0.25 per cent
  • says this facility is for at least A$90 billion
  • says government has also developed a complementary program of support for the non-bank financial sector
  • says policy steps complement government fiscal measures

10 year bond yield is up 120+ bps as the RBA flags it'll begin QE.

The steps outlined will provide cheaper funding to banks, that they'll hopefully pass on to households and business dueign this crisis.

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more to come