MNI BRIEF: RBA Reconsidered Taper In August, Minutes Show

The Reserve Bank of Australia considered delaying the tapering of its bond purchases at its August meeting but decided that additional purchases would have more impact as the economy re-opens in 2022, according to minutes of the meeting released on Tuesday.

In July, the RBA decided to decrease its weekly bond purchases from AUD5 billion per week to AUD4 billion in September, and then review the purchases again in November. It also held intact its view on baseline forecasts, see: MNI INSIGHT: RBA Baseline Forecasts Still Current In Lockdowns.

But further lockdowns would see RBA forecasts move to a "weaker path" and a delay in achieving the targets. The minutes show the board consensus is that additional bond purchases would only have a "marginal effect at present", with around half of the population under lockdown in the two largest cities of Sydney and Melbourne.