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MNI BRIEF: QE All About The Currency, Says RBA

SYDNEY (MNI)

The Reserve Bank of Australia's second AUD100 billion program of Quantitative Easing is designed specifically to maintain downward pressure on the Australian dollar, according to the minutes of the February Board meeting released today.

If bond purchases ceased in April, it was likely that there would be "unwelcome significant upward pressure on the exchange rate," the minutes, published Tuesday, said.

The RBA re-iterated the view that negative interest rates remain "extraordinarily unlikely," with QE now considered the main tool to influence the exchange rate, although the central bank is prepared to keep rates at their current record low 0.10% -- the RBA's effective lower bound -- until 2024, given sluggish inflation and wages growth.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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