QUANTITATIVE EASING (MONETARY POLICY) – AUSTRALIA

RBA inflation goal requires negative rates

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Original article by David Rogers
The Australian – Page: 27 : 3-Oct-19

Andrew Boak, the chief economist at Goldman Sachs, says there is a material risk that the Reserve Bank of Australia will reduce the cash rate to less than 0.5 per cent and implement a quantitative easing program. Boak adds that the central bank’s own macroeconomic model suggests that a negative cash rate would be needed to deliver on its inflation and employment targets over the next 2-3 years. Boak expects the cash rate to be cut by another 25 basis points in November, while financial markets have fully priced in a rate cut by February.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY

Economists raise chances of QE

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Original article by David Rogers
The Australian – Page: 17 & 27 : 26-Sep-19

UBS’s chief economist George Tharenou says there is a growing possibility that the Reserve Bank of Australia will have to resort to unconventional monetary policy options. He says the US Federal Reserve is likely to reduce official interest rates by another one per cent over the next year, as US economic growth slows due to the latest round of tariff hikes. This in turn will put pressure on the RBA to further ease monetary policy, and potentially resort to measures such as quantitative easing. Tharenou expects the RBA to reduce the cash rate to just 0.25 per cent by May 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Reserve Bank flags QE to lift stagnant economy

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Original article by David Rogers
The Australian – Page: 24 : 28-Aug-19

The Reserve Bank of Australia’s deputy governor Guy Debelle says the nation has been a major beneficiary of the rules-based global trading system, and he has warned that the current threats to this system present a major risk to both the Australian and global economies. Debelle has also used an Economic Society speech to indicate that the RBA could be open to quantitative easing if the cash rate falls to 0.5 per cent. However, David Plank of the ANZ Bank says the RBA is unlikely to pursue such a course of action unless the cash rate falls to 0.25 per cent or lower.

CORPORATES
RESERVE BANK OF AUSTRALIA, ECONOMICS SOCIETY OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Where’s the crisis? Westpac skewers talk of quantitative easing

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Original article by Patrick Commins
The Australian Financial Review – Page: 29 : 22-Aug-19

Lyn Cobley, the head of institutional banking at Westpac, says unconventional monetary policy was necessary in response to the global financial crisis. However, she says there is no need for the Reserve Bank to pursue quantitative easing at present, as the Australian economy and the nation’s banking system are "far from crisis". She adds that Westpac’s senior institutional bankers generally agree that further reducing interest rates would have little impact on the borrowing and investment intentions of their clients.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, EUROPEAN CENTRAL BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Bond signal: ultra-low rates for a decade

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Original article by David Rogers
The Australian – Page: 17 & 26 : 9-Aug-19

The Reserve Bank of Australia is widely tipped to reduce the cash rate below 0.5 per cent within six months, and overnight indexed swaps pricing suggests that the cash rate will average 0.84 per cent over the next decade. David Plank of the ANZ Bank warns that the central bank will most likely need to adopt a quantitative easing policy within 5-10 years; he adds that this will probably not be necessary in the next year or so, unless there is a significant downturn in the global economy.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RBC CAPITAL MARKETS, EUROPEAN CENTRAL BANK, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS

Reserve flags rate cut, cash splash

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Original article by Adam Creighton
The Australian – Page: 1 & 8 : 7-Dec-18

The Reserve Bank of Australia’s deputy governor Guy Debelle has indicated that there is potential for further monetary policy easing. The central bank has left the cash rate unchanged at 1.5 per cent since August 2016, and it has signalled in the past that a rate rise is more likely than a cut. Debelle has also indicated that the RBA could adopt a quantitative easing policy if it is considered necessary in order to stimulate the economy. He has also praised Labor’s fiscal stimulus at the onset of the global financial crisis, saying it was a key factor in the resilience of the domestic economy.

CORPORATES
RESERVE BANK OF AUSTRALIA, FITCH RATINGS LIMITED, BUSINESS COUNCIL OF AUSTRALIA, STANFORD UNIVERSITY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY