RBA makes subtle change to its bond operations today
RBA governor Lowe may have done his part earlier in talking down the aussie and keeping the bond market in-check but the central bank also took an extra step in ensuring that investors got the message as they made borrowing shorter-dated bonds more expensive (h/t @ Stephen Spratt, Bloomberg).
The RBA announced that the indicative fee for borrowing of April 2023 and April 2024 bonds will be done at 100 bps as compared to the usual 25 bps charge.
Keep in mind that the RBA has a target rate of 0.10% for its three-year bond yield and this just makes it more expensive for short prospects to drive said rate higher.
