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The Board Minutes print to co-ordinated monetary and fiscal policy stimulus to address economic threat of COVID-19; more to come, according to analysts at Westpac Institutional Bank.

Key quotes

“The Minutes of the Monetary Policy Meeting of the Reserve Bank Board confirmed that the decision to lower the cash rate from 0.75% to 0.5% was driven by the Board’s concern about the impact of COVID-19 on the Australian economy and the world economy.”

“These Minutes provide further support to Westpac’s view that a further 0.25% reduction in the cash rate can be expected. That is almost certain to be the effective lower bound for the cash rate as set out by the Governor in a speech on November 26th.” 

“The much awaited quantitative easing will also be announced. That policy will be targeted at the risk free yield curve effectively setting a price rather than nominating a quantity of purchases as has been  used by the FOMC.”