(OP)inions Australia ends QE

 January 31, 2022 

Australias central bank will end its 15 month-old quantitative easing programand revise up its inflation forecasts, setting the stage for an interest-rate hike in the third quarter, economists say. 

The Reserve Bank will keep its cash rate at 0.1% on Tuesday, while ending its A$4 billion ($2.8 billion) a week of bond purchases, a survey of economists showed.

They now see a first rate hike coming in about six months‘ time, well ahead of their previous view of early 2023 and the bank’s guidance of 2024. 

A more hawkish Australian central bank would bring it closer to counterparts from Wellington to Washington, who have started or will soon begin tightening policy to try to combat inflation.

While consumer prices in Australia arent as hot as they are in the U.S. or New Zealand, they have moved into a zone that Governor Philip Lowe set out as necessary before any rate increase. 

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