Reserve Bank of Australia more likely to buy bank and mortgage bonds to lower borrowing costs, rather than government debt.
Report in the local press - Australian Financial Review on Treasury's internal government advice analysing "unconventional monetary policy"
- Treasury warned Josh Frydenberg that bank profit margins will be "squeezed" by the Reserve Bank of Australia's ultra-low interest rates
- raised the possibility of the RBA offering cheap funding to banks, buying their bonds or via direct lending
- This would compensate for the "intense pressure" on profit margins and ensure lower borrowing costs flowed through to the economy
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