Wayne Cole

SYDNEY (Reuters – Australia’s central bank believes that spreading the Omicron version will not disrupt an ongoing economic recovery. It has the ability to stop quantitative easing at any time if activity data remains positive.

According to the minutes of the Reserve Bank of Australia’s Dec. 7 policy meeting, the Board was still committed to keeping interest rate at 0.1% but considered how to end the A$4 billion in weekly bond purchasing given the economic recovery.

The minutes, released on Tuesday, showed that “Members noted that Australia’s economy was quickly recovering following the interruption in growth due to the Delta variant outbreak.”

“The Omicron variant’s appearance was an unknown source, but the recovery was not affected by it.”

The Board will consider a variety of options, including the possibility to extend bond buying up to May for the same or reduced amount or to end it entirely in February.

It would all depend on the economic performance, and data such as inflation, jobs, spending, etc.

The meeting saw record November employment numbers. There was a 366,100 job increase, and a sharp drop in unemployment to 4.6%.

Due in January, inflation data for the fourth-quarter will be available. This is due to supply limitations and high energy prices.

Many market analysts have concluded that this strong performance has convinced the Board to stop bond purchases in February.

Tapas Strickland is a NAB director for economics. He stated, “We believe the RBA (Republican Bank of Australia) will once again be amazed at the performance the economy.”

NAB sees RBA ending QE on February. This is despite the fact that unemployment stands at 4.6%. The U.S. Federal Reserve will also end QE on March.

A problem arises from a rise in coronavirus-related cases since lockdowns were lifted. New South Wales has seen cases jump to record highs, and this is not the first time.

So far, the government has not resisted any pressure to reinstate social restrictions. Instead they have urged people to receive booster shots.

($1 = 1.4067 Australian dollars)