RBA’s approach to QT does not involve selling bonds
Selling assets could undermine future quantitative easing programmes, says assistant governor
The Reserve Bank of Australia will implement a gradual quantitative tightening that does not involve selling bonds, explained assistant governor Christopher Kent in a speech on May 23.
The RBA is focusing instead on increasing the cash rate. In early May the central bank increased it by 25 basis points to 0.35%. This was the first interest rate increase since 2010.
“The Reserve Bank board noted that it currently has no plans to sell bonds from its portfolio,” said Kent. Officials deem a higher
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