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Daily monetary policy reactions to the pandemic: The Australian case

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  • Burdekin, Richard C.K.
  • Nguyen, Quynh

Abstract

In contrast to the more typical monthly series, Reserve Bank of Australia data offer a high frequency window into central bank actions following the onset of the pandemic. Daily observations demonstrate not only the absolute size of the Reserve Bank’s open market purchases but also a dramatic increase in the conditional variance identified under GARCH estimation. Regression analysis and impulse response functions reveal significant monetary policy responses to government support measures and exchange rate movements against the US dollar. Notwithstanding its overall highly expansionary monetary policy, the Reserve Bank appears to have tempered the pace of its open market purchases when either the government policy response intensified or currency depreciation increased.

Suggested Citation

  • Burdekin, Richard C.K. & Nguyen, Quynh, 2023. "Daily monetary policy reactions to the pandemic: The Australian case," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 24-32.
    • Handle: RePEc:eee:ecanpo:v:78:y:2023:i:c:p:24-32
    DOI: 10.1016/j.eap.2023.02.009
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    References listed on IDEAS

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    More about this item

    Keywords

    Monetary policy; Pandemic; Australia;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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