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Australian c.bank saw the taper decision reverse when the lockdowns hit the economy

  • reuters: // realtime / verb = Open / url = cpurl: //apps.cp./Apps/cb-polls? s = GCR01 + 2H + 7 & st = Menu + G + C survey data
  • RBA decision expected on August 3rd at 0430 GMT

SYDNEY, July 29 (Reuters) – The Australian central bank is likely to reverse a decision to cut its bond-buying program when it holds its monthly meeting with the country’s economy next week due to a longer and deeper virus lockdown in Sydney.

All but one of 44 economists polled by Reuters between July 22nd and 28th saw no change in the 0.1% interest rate at the Reserve Bank of Australia (RBA) board meeting on August 3rd, with one a decrease to 0.05% is forecast.

Of the 25 economists who answered a question about the RBA’s quantitative easing program, 14 believe the central bank would reverse its July taper decision due to a rapidly spreading COVID-19 outbreak in the country’s most populous city.

Sydney is currently in the fifth week of the coronavirus lockdown, which has been extended to the end of August, led by a relentless spike in COVID-19 cases of the highly transmittable Delta variant. Continue reading

“With the recent developments in COVID-19, Australia has slipped from front runner to laggard,” said Nomura economist Andrew Ticehurst.

“We agree with others that the RBA is now likely to put its plans to reduce bond purchases from early September on hold,” said Ticehurst. Continue reading

Last month, the RBA announced that it would cut its bond purchase program to A $ 4 billion a week, from the current A $ 5 billion as of September, as economic results had slightly exceeded expectations. Continue reading

Since then, many economists have slashed forecasts for Australia’s gross domestic product (GDP), which is a dramatic turnaround in the country’s economy. Continue reading

The A $ 2 trillion ($ 1.5 trillion) economy is shrinking this quarter, the first shrinkage since June 2020, with a major blow to the job market and consumer spending. Continue reading

Economists have also postponed their expectations for the next RBA rate hike to the third quarter of 2023, after previously forecasting a 15 basis point hike for the second quarter, a median of 19 respondents showed.

Survey by Shaloo Shrivastava and Vivek Mishra in Bengaluru; Letter from Swati Pandey; Editing by Sam Holmes

Our Standards: The Thomson Reuters Trust Principles.

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