RBA ready to act should pandemic slow economic recovery
As Australia grapples with COVID-19 restrictions to curb a new surge in a more contagious Delta variant, the Reserve Bank of Australia (RBA) assured to evaluate its bond-buying program considering the nation’s economic factors and health situation.
The central bank maintained its bullish sentiments made two weeks ago with a planned tapering of bond purchases. It also expected the economy to recover quickly from a pandemic-driven contraction this quarter. However, Sydney’s infection rate continues to increase, while Melbourne and Canberra were forced to stretch their lockdowns.
The minutes of its August meeting released Tuesday showed the RBA “considered the case for delaying the tapering of bond purchases to A$4 billion a week currently scheduled for September.”
The RBA is now buying A$5 billion ($3.7 billion) worth of assets per week as part of its quantitative easing program.
It noted that its economic forecast was intended for a resumption of strong growth in 2022, believing any additional bond purchases would have their “maximum effect at that time.”