RBA’s Lowe: Done all can on rates, focus now on QE

Additional comments crossing the wires, as the Reserve Bank of Australia (RBA) Governor Phillip Lowe continues to speak at the post-monetary policy meeting press conference on Tuesday.

Victoria lockdown has cut 1 to 1.5 ppt off GDP.

But outlook for labor market required further policy action even without lockdown.

Encourages borrowers to seek lower rates from their banks.

Not much room between zero and 0.1% for cash rate.

At effective lower bound now.

Done all can on rates, focus now on QE.

Was broad consensus on policy among RBA board.

Not targeting five or 10-year yields.

Would be helpful if 10-year yields came down further.

To hold around 15% of Australian govt bonds under current plan.

If need to buy more bonds, will do so.

RBA’s latest easing is not a judgement on fiscal policy.

Other central banks have bought a lot more debt than we are planning to do.

We can effectively create money without limit.

Hope not permanently in this world of zero interest rates.

Hopes rates will rise sometime in the next five years.

Have not ruled out buying bonds outside 5 to 10-year range.

Not particularly concerned rates will push up house prices excessively.

Updated economic forecasts contain today's policy decision.

Market reaction

AUD/USD is off the lows but remains in the red below 0.7050 despite Lowe explicitly ruling out negative rates policy.

The spot was last seen trading at 0.7042, down 0.12% on the day.