MNI BRIEF: RBA Ponders Three Options For QE Call In February

Fresh economic data and the situation with the Omicron virus will determine the Reserve Bank of Australia’s February decision on its bond buying programme, according to RBA Governor Philip Lowe on Thursday.

In a speech in regional Australia, Lowe said the central bank was pondering three options when it reviews the bond buying programme at its next meeting in February, and no decision had yet been made.

The first option was to taper purchases from the current rate of AUD4 billion per week, the second was to taper and review again in May, with the third option being to halt purchases altogether. “If better-than-expected progress towards the board’s goals was made, then the case to cease bond purchases in February would be stronger,” Lowe said.

“Alternatively, if progress is slower than expected, or if the outlook becomes more uncertain, the case for retaining flexibility and reviewing again in May would be stronger.” The RBA will have bought AUD$350 billion in government debt by February, equivalent to around 35% of all debt on issue.