Global Perspectives Podcast with guest Bruce Preston on RBA's monetary policy in a time of crisis by Global Perspectives Policy Podcast

In this episode we discuss the recent monetary policy response by the Reserve Bank of Australia in response to the COVID-19 crisis. On 18th March the Reserve Bank Board met for the second time in a month – only the second such unscheduled meeting in its history – to discuss a comprehensive package to support the Australian economy. The four main points of the package were: i) a reduction in the cash rate target to 0.25%, ii) a target on 3-year Australian Government Treasury bond yields of around 0.25%, iii) the creation of a term funding facility for the banking system – particularly focusing on small and medium-sized businesses, and iv) a shift in remuneration of exchange settlements balances at the RBA to 10 basis points. We discuss the implications and effectiveness of these policies during this period of volatility and uncertainty. We also discuss what the the zero lower bound means for Australia and how long we can expect to remain there. This conversation was recorded on 25 March 2020.

Music: https://www.purple-planet.com