Australia: Still a huge amount the RBA could do - ANZ

Research Team at ANZ, notes that the former RBA board member Dr John Edwards appeared on ABC TV’s 7:30 Report on Wednesday night, where he discussed the recent rate cut and the positioning of the RBA.

Key Quotes

“Edwards remarked the cost of capital for banks is higher due to regulation, but the average cost has fallen due to lower interest rates. Edwards also said with the RBA’s cash rate now at 1.5% there is still a huge amount the RBA could do, such as buying bonds, buying mortgages, direct AUD intervention, and introducing negative interest rates. However, he also remarked that the RBA doesn’t want to do that given that the economy is currently performing quite well.”