The Reserve Bank of Australia (RBA) maintained plans to reduce its bond purchases, assuming the economy would recover quickly aided by increased vaccinations.
The Australian central bank ended its September edition policy meeting by keeping interest rates at a low of 0.1% as widely expected.
The RBA’s decision to continue with its plan has obviously taken the market by surprise, for which the bond -buying rate will be reduced to $ 4 billion a week from $ 5 billion previously.
However, this purchase will be extended until at least mid-February which is considered a dovish signal by investors. Initially it planned to review the program in mid -November.
Even so, Governor Philip Lowe still maintained his optimistic view by saying the delta variant is expected to cause a delay, but will not interfere with the recovery.
He said the extension of bond purchases until mid -February 2022 reflects a delay in the economic recovery and increased uncertainty associated with the delta variant outbreak.
He added that policymakers will continue to review bond -buying programs taking into account economic and health conditions.
The decision was made because the delta variant proved more difficult to contain, forcing closures in Sydney and Melbourne to be extended for up to months. The Australian economy is expected to contract significantly this quarter and analysts have also begun lowering their growth projections for the fourth quarter.
The Aussie dollar, which initially rose following the results, returned lower to around 0.7420 against the US dollar.
