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- RBA's Lowe: Australia unlikely to get to the point where it needs QE
RBA's Lowe: Australia unlikely to get to the point where it needs QE
QE is "not on our agenda" at this point
QE would only be considered should cash rate reach 0.25%
There may come a point when QE would help but I "don't expect us to get there"
Still expects economy to move in the right direction, albeit gradually
QE would be considered if evidence accumulates that we were unlikely to meet policy goals
Need evidence that moving away from, rather than towards, goals for full employment, inflation
Board would then consider buying government bonds as only QE measure
Would hope other public policy options were also on the agenda
Use of all QE measures could create "inaction" bias for other policy makers
Negative interest rates in Australia are extraordinarily unlikely
We have no appetite" to make outright purchases of private sector assets as part of qe
No need to provide extra liquidity through market operations
International experience suggests QE does put downward pressure on both rates and exchange rate
Would need to balance these positive effects with possible side-effects
Would need to consider effects of bond buying on market functioning
Strong evidence that various central bank liquidity measures worked during crisis
Less convinced that other unconventional measures worked, jury still out
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