RBA’s Debelle: Economy will need considerable policy support for some time

Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle's is on the wires now, via Reuters, making a scheduled speech at the Economic Society of Australia webinar on Tuesday.

Key quotes

“Liquidity operations working as intended.”

“Effective cash rate around 13-14 bps, helping keep borrowing costs low across economy.”

“Economy has turned out to be somewhat better in the June quarter than feared.”

“Declines in GDP and in hours worked have still been historically large.”

“Considerable uncertainty over the economic path from here.”

“Will require considerable policy support for quite some time to come.”

“RBA stands ready to do more as circumstances warrant.”

“Any rate hike likely to be some years away given outlook for inflation, jobs.”

“0.25% target for three-year bond rate reinforces the forward guidance on the cash rate.”

“If yield target credible, the RBA does not need to purchase many bonds at all to achieve the target.”

“Stands ready to scale up bond purchases if necessary to achieve objectives.”

“Ready to buy illiquid bonds shorter than 3-years if their yields rise too high.”

“RBA bond buying unlikely to stoke inflation, which is set to remain below target.“

“Australian government has capacity to repay bonds it has issued.”

“RBA to scale back longer-term repo offers in daily operations.”

“Over 60 institutions have drawn on RBA’s term funding facility.”

AUD/USD unfazed by RBA’s Debelle

AUD/USD keeps gains around 0.6880 following RBA Debelle's speech. Upbeat China’s NBS Manufacturing PMI and risk-on market profile continue to lend support to the higher-yielding aussie dollar.