RBA causes AUD recovery

Source: Dukascopy Bank SA
On December 7, the Reserve Bank of Australia published an official monetary policy statement. In addition, the official cash rate was revealed.

The central bank kept its interest rate unchanged and it would continue to purchase government securities at a pace of $4 billion per week until the middle of February 2022. Meanwhile, the statement includes comments on the Delta and Omicron strains of the coronavirus.

Quoting the statement: "At its meeting today, the Board decided to:

  • Maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent
  • Continue to purchase government securities at the rate of $4 billion a week until at least mid February 2022.

The Australian economy is recovering from the setback caused by the Delta outbreak. High rates of vaccination and substantial policy support are underpinning this recovery. Household consumption is rebounding strongly and the outlook for business investment has improved. The emergence of the Omicron strain is a new source of uncertainty, but it is not expected to derail the recovery. The economy is expected to return to its pre-Delta path in the first half of 2022."

Released Document

Statement by Philip Lowe, Governor: Monetary Policy Decision

The announcement caused a recovery of the Australian Dollar's value. By 08:00 GMT, the AUD/USD had already recovered 39 base points or 0.55%.

On a larger scale, the announcement might have reversed the five week decline of 562 base points or 7.44%, which occurred from October 28 up to December 2.

Initial Reaction

Larger scale situation

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Actual Topics

Wed, 08 Dec 2021 15:49:19 GMT

Bank of Canada keeps policy unchanged

On December 8, the Bank of Canada published its Rate Statement and Overnight Rate. The central bank kept its interest rate and government bond holdings unchanged. The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent.

Fri, 03 Dec 2021 13:43:30 GMT

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