RBA may be forced to U-turn on taper timing

Fresh records: People wearing masks walk past a retail store in Sydney. The city’s Delta outbreak has reached fresh records in recent days despite five weeks under strict stay-at-home orders. — AFP

SYDNEY: Australia’s central bank chief Philip Lowe faces the awkward prospect of having to walk back a taper announcement made only a month ago, as a resurgence of the coronavirus continues to confound the expectations of policymakers across the globe.

Lowe is expected to put off until later in the year plans to scale back weekly bond purchases, while keeping the cash rate at 0.1% today. That’s the view of a large majority of 18 economists surveyed by Bloomberg last week. Two of them went a step further and flagged the risk of the bank also extending its three-year yield target to the November 2024 bond.