SYDNEY, Nov 24 (Reuters) - The Reserve Bank of Australia's
(RBA) latest policy easing has succeeded in holding down the
local currency, a top central banker said on Tuesday, while also
cautioning against removing stimulus too soon.
Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle
said cuts in official interest rates and the purchase of
government bonds had lowered borrowing costs across the economy
and boosted incomes for most households.
Historically low rates also made it easier for government to
fund its massive fiscal stimulus, said Debelle, adding that the
level of debt was "absolutely sustainable".
Debelle said the RBA's decision to buy A$100 billion ($72.98
billion) of longer-dated bonds over six months was needed
because Australian 10-year yields had been above those in peer
nations, putting unwelcome upward pressure on the Aussie dollar.
"This package has materially lowered the structure of
interest rates in the Australian financial system," he said in a
speech to Australian business economists.
"The decline in interest rates across the yield curve has
lowered the exchange rate, relative to what it otherwise would
be."
Debelle held out hope that positive news about potential
vaccines for coronavirus would help bolster confidence in the
economy, though he noted it would take some time for such
vaccines to be widely available and distributed.
With any recovery likely to be bumpy, he argued it was best
to be "careful of removing the stimulus too early."
($1 = 1.3702 Australian dollars)
(Reporting by Wayne Cole; Editing by Kim Coghill)