Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 10-Mar-20
Deutsche Bank economist Phil O’Donaghoe does not expect quantitative easing to be necessary in response to the coronavirus. He says another official interest rate cut in April and the federal government’s stimulus package should result in a 2019-20 Budget deficit of about 1.2 per cent of GDP. However, O’Donaghoe warns that if the Reserve Bank of Australia does resort to quantitative easing, it would need to purchase up to $30bn worth of bonds to generate the same macroeconomic stimulus as a rate cut of 25 basis points.
RESERVE BANK OF AUSTRALIA, DEUTSCHE BANK AG