Company News

REFILE-POLL-Australia to announce A$100 bln QE next week

 (Corrects adding POLL tag to headline)
    By Swati Pandey
    SYDNEY, Oct 28 (Reuters) - Australia's central bank will
likely expand its government bond buying programme by about
A$100 billion ($71.29 billion) at its meeting next week,
targeting longer duration securities, according to a Reuters
poll of 14 economists.
    An overwhelming majority of respondents believe the Reserve
Bank of Australia (RBA) will expand its quantitative easing
programme to include five-to-ten year Australian government and
semi-government bonds at its Nov.3 board meeting, the poll
    The RBA is also widely expected to trim its cash rate as
well as the target for three-year government bond yields by 15
basis points to 0.1% at the meeting, according to a separate
poll conducted earlier this month.  
    Economists say the RBA's balance sheet could easily approach
A$500 billion by the middle of next year, equal to about a
quarter of Australia's annual gross domestic product (GDP).  
    However, they are divided on the approach policymakers might
take for the bond buying programme, the poll shows. (See table
    Westpac and Bank of America are among those predicting an
"open-ended" bond buying programme, meaning the RBA would not
commit to a number.
    "We think the RBA will try to maintain maximum flexibility,"
said Bank of America economist Tony Morris.
    Morris expects around A$75 billion to A$100 billion in
outright bond purchases of five to 10-year bonds by end-2021. 
    "This could change in line with a flexible approach to the
ongoing mix of the unconventional policy package," he added.
    AMP economist Shane Oliver expects a monthly bond buying
program of around A$12 billion with a commitment to continue it
as long as necessary, saying it "will convey more conviction
than say a fixed amount of A$150 billion spread over 12 months."
    Others such as ANZ predict around A$100 billion of QE,
targeting the five-to-ten year part of the yield curve to help
lower long-term borrowing costs. 
 Bank                    Qty expected         Timeframe
 AMP                     A$12 bln per month   end-2021
 ANZ Banking Group       A$100 bln            mid-2021
 Bank of America         A$75-A$100 bln       end-2021
 Capital Economics       A$150 bln            end-2021
 Commonwealth Bank       A$100 bln            open-ended
 Citi                    A$150-A$200 bln      in February  
 Goldman Sachs           A$100 bln            not specified
 JPMorgan                A$100 bln            in February
 Macquarie               A$100-A$150 bln      mid-2022
 Morgan Stanley          A$5 bln per month    no end-date
                                              or maturity
 NAB                     A$143 bln            end-2021
 RBC                     A$100-A$180 bln      end-2021
 TD Securities           A$80-A$100 bln       end-2021
 Westpac Banking Group   Open-ended           open-ended
($1 = 1.4027 Australian dollars)

 (Reporting by Swati Pandey; Editing by Simon Cameron-Moore)