The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent.
Bonds purchased by the central bank directly seems sensible. In Australia, the Government sell bonds to “secondary markets” first. So, commercial banks, hedge funds. pensions etc. The RBA (Central Bank) then buys them back from these secondary and inflated markets. poof money. Why is this in any way a good idea?
Bonds purchased by the central bank directly seems sensible. In Australia, the Government sell bonds to “secondary markets” first. So, commercial banks, hedge funds. pensions etc. The RBA (Central Bank) then buys them back from these secondary and inflated markets. poof money. Why is this in any way a good idea?