MNI BRIEF: RBA Says It Has Time To Decide On Bond Portfolio

The Reserve Bank of Australia is yet to decide on the next steps for the AUD350 billion of government bonds it has purchased under its programme of quantitative easing, saying that because the next maturities are in July it has time to monitor economic developments before making a decision.

In the Friday release of the Statement on Monetary Policy, the RBA says it will make a decision on “whether or not to re-invest the proceeds of maturing bonds” at its May meeting, see: MNI BRIEF: RBA Repeats 'Patient' On Inflation, Rate Hike.

Ending the programme “does not imply a near-term increase in interest rates, nor does it represent a tightening of monetary policy. The international evidence is that it is the stock of bonds purchased, not the flow of purchases, that provides the economic support."

At its board meeting last week, the RBA said it would stop AUD4 billion in weekly purchases since September – on Feb 11.