The Australian central bank doubled the size of its daily quantitative easing program, announcing that it would increase bond purchases from $ 2 billion to $ 4 billion today.
Following the announcement, 10-year government bond yields fell to 1.61% from 1.72%. The 10-year yield increased to 1.95% last Thursday as bonds sold out. While 5-year yields were traded at 0.70%.
RBA policymakers, who will hold a policy meeting on Tuesday, may consider increasing its quantitative easing program to control the increase in bond yields in line with their target levels.
The central bank has set its 3-year government bond yield target at 0.10%.
However, according to analysts from Australian banks, they do not expect the RBA to expand the size of its overall quantitative easing program, but may be more flexible in the amount of its daily bond purchases.
In today's trading session, the Aussie dollar traded flat around the price level of 0.7760 against the US dollar, after showing some recovery in the early opening of the Asian session.
On Thursday last week, the central bank bought $ 3 billion worth of government bonds worth $ 3 billion in the secondary market, three times the amount it bought on Monday.
