VIEW: Westpac Expect Extension Of QE, With 3-Year Yield Target Tweak In '22

Westpac note that "as we gaze into 2021 and 2022 we are aware that one significant issue stands out from a policy perspective. That is how the RBA will address its QE program after the committed A$100 billion of purchases is completed in June 2021. We expect that the Bank will decide to extend the program for a further six months with another A$100 billion in committed purchases. Those purchases are likely to be made up of A$70 billion in AGS and A$30 billion in semi-government securities. In 2022 we expect the RBA will reduce the QE program to A$50 billion per six months (two tranches) and gradually raise the rate for the three year bond target through the year, reaching 0.3% by year's end."