RBA: Decision to extend the bond purchases reflects delay in recovery, uncertainty of Delta outbreak
|Following are the key headlines from the September RBA monetary policy statement, via Reuters, as presented by Governor Phillip Low.
Committed to maintaining highly supportive monetary conditions.
Purchase government securities at the rate of $4 billion a week and to continue the purchases at this rate until at least mid-February 2022.
Recovery in the Australian economy has, however, been interrupted by the delta outbreak.
GDP is expected to decline materially in the September quarter and the unemployment rate will move higher over coming months.
This setback to the economic expansion is expected to be only temporary.
Decision to extend the bond purchases at $4 billion a week until at least February reflects the delay in recovery and uncertainty of delta outbreak.
Delta outbreak is expected to delay, but not derail, the recovery.
Bond buying will be reviewed in light of economic and health conditions, and implications for full employment and inflation goal.
Uncertainty about the timing and pace of this bounce-back and it is likely to be slower than that earlier in the year.
Economy will be growing again in the December quarter and is expected to be back around its pre-delta path in the second half of next year.
Much will depend on the health situation and the easing of restrictions on activity.
Given the environment of rising housing prices and low interest rates, the bank is monitoring trends in housing borrowing carefully.
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