If the Reserve Bank has no more three-year government bonds to buy by mid-2021, it may no longer be able to put downwards pressure on the benchmark yield for banks fixed mortgage products.
The metaphorical 'shelf' for three-year government bonds is almost empty, according to the National Australia Bank .The Reserve Bank Of Australia has been buying up government bonds to maintain record-low interest rates
Economists say this will make it unlikely that interest rates will move significantly lower from their current rate "We note that at the current rate [of Reserve Bank bond buying]… the RBA will own nearly all April 2024 government bonds by mid-2021."The Reserve Bank has been busy buying up Commonwealth Government securities over the past few months.
"The purchases of $100 billion will take place over a period of approximately six months, with weekly purchases of around $5 billion," the update stated.
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