RBA Governor Philip Lowe hinted in a speech that the central bank is ready for deliver more monetary easing in the upcoming meeting in November. He noted that “as the economy opens up, though, it is reasonable to expect that further monetary easing would get more traction than was the case earlier.”
Lowe also noted that that financial stability considerations “have changed somewhat”. To the extent that an easing of monetary policy helps people get jobs it will help private sector balance sheets and lessen the number of problem loans. In so doing, it can reduce financial stability risks.”
Also, while RBA’s balance sheet has “increased considerably” since March, “large increases have occurred in other countries. RBA is “considering the implications os this as we work through out own options”.
Lowe’s comments are in line with market expectations of another cut in cash rate to 0.10%, with expansion of asset purchases to longer maturities.