Central banks around the globe settled to follow the existing monetary policies to support the economic recovery during the coronavirus crisis.
On Tuesday, October 6, the Reserve Bank of Australia issued its Rate Statement. The Bank decided to keep the Cash Rate at the 0.25% level.
On Tuesday, November 3, the Reserve Bank of Australia published its Rate Statement once again.
According to the official release, the Bank decided on a package of further measures to support the Australian economy: a reduction in the cash rate target to 0.1%;
On Wednesday, October 28, the Bank of Canada published its Monetary Policy Report. The Bank maintained its target for the overnight rate at the effective lower bound of 0.25%, with the Bank Rate at 0.50% and the deposit rate at 0.25%.
Moreover, the Bank announced it was recalibrating the quantitative easing (QE) programme to shift purchases towards longer-term bonds, which have more direct influence on the borrowing rates. At the same time, total purchases would be gradually reduced to at least CAD4B a week.
On Thursday, October 29, the Bank of Japan issued the Monetary Policy Statement. The Japanese policymakers voted to maintain the negative interest rate of minus 0.1% to the Policy-Rate Balances in current accounts held by financial institutions at the Bank.
Additionally, the Bank claimed it would purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields would remain at around zero percent. Also, the Bank announced that it would actively purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) for the time being so that their amounts outstanding would increase at annul paces with the upper limit of about ¥12T and about ¥180B, respectively.
The Japanese central bank will continue with "Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control". Moreover, the Bank will continue to support financial markets through the Special Program to Support Financing in Response to the Novel Coronavirus.
Initial reaction on the market:
The European Union
On Thursday, October 29, the European Central Bank announced its decisions on monetary policy:
On Thursday, November 5, the Bank of England released the Monetary Policy Report.
According to the official release: "At its meeting ending on 4 November 2020, the MPC voted unanimously to maintain Bank Rate at 0.1%. The Committee voted unanimously for the Bank of England to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion. The Committee voted unanimously for the Bank of England to continue with the existing programme of £100 billion of UK government bond purchases, financed by the issuance of central bank reserves, and also for the Bank of England to increase the target stock of purchased UK government bonds by an additional £150 billion, financed by the issuance of central bank reserves, to take the total stock of government bond purchases to £875 billion."
On Thursday, November 5, the Federal Reserve issued the FOMC Statement. As the result, the US policymakers voted to keep the target range for the federal funds rate at 0 to 0.25%.
Also, it was announced that the Federal Reserve would increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.
On Wednesday, the Reserve Bank of New Zealand released the Monetary Policy Statement.
According to the official release: "The Committee agreed that the additional stimulus would be provided through a Funding for Lending Programme (FLP), commencing in December. The FLP will reduce banks' funding costs and lower interest rates. The Committee will also continue with the Large Scale Asset Purchase (LSAP) Programme up to $100 billion, and retain the Official Cash Rate (OCR) at 0.25 percent in accordance with the guidance issued on 16 March."
Initial reaction on the market: