By Sophia Rodrigues
For the first time since announcing the package of measures on March 19, the Reserve Bank of Australia has opened up the possibility of lowering the target on the three-year Australian government bond yield from 0.25%.
The RBA could cut the target to 0.10%, along with a cut in the cash rate target and the rate on the Term Funding Facility.
In a speech Tuesday, Governor Philip Lowe said it is possible for the RBA to lower the various interest rates that are currently set at 25bps.
At the July 7 board meeting, the RBA decided there was no need to adjust its package of measures currently, but this could change later.
“The Board has, however, not ruled out future changes to the configuration of this package if developments in Australia and overseas warrant doing so,” Lowe said.
The “various” interest rates Lowe referred to in his speech are the cash rate target, the rate on Term Funding Facility and the target on three-year government bond yield.
Central Bank Intel had discussed possibility of a cut in the RBA cash rate target to 0.10%.
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