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…The Reserve Bank is now having another one of its dalliances with indolence.
Knowing full well that monetary policy can now no longer add to nominal demand – something that now, only fiscal policy is capable of doing, the Reserve Bank is way behind the curve in supporting the government in its budgetary funding measures.
For a moment, it showed some unlikely form in pursuing its 0.25% bond yield target for three year Treasury bonds and a low interest facility for banks.
But now, after 600,000 superannuation accounts were cleared and closed down, with 500,000 of those belonging to people under 35 – a withdrawal of $35billion in personal savings, and further demands arising from the employment hiatus in Victoria, the Deputy Governor of the Bank, Guy Debelle, yesterday strolled out with debating points about what further RBA action
might be contemplated.
As history has shown, when a real crisis is upon us the RBA is invariably late to the party. And so it is again.
Source: The Guardian
Keyword: Coronavirus Australia latest updates: SA reopens NSW border as Victoria’s health minister faces hotel inquiry | Australia news