Speech
Monetary Policy During COVID
[*]
Guy Debelle
Deputy Governor
Shann Memorial Lecture
Online - 6 May 2021
Thank you for the opportunity to speak to you tonight. I am honoured to be giving the Shann
lecture.
Edward Shann's work had a lasting impact on Australian economic thought. As an economic
historian, Shann looked to the past to inform solutions to the most important problems of his time,
including how to lift Australia out of the Great Depression. Many of Shann's key contributions seem
orthodox today but were well ahead of his time. Shann advocated for the removal of tariffs, a shift
away from centralised wage fixing and a move to a more flexible exchange rate. Shann also saw an
[1]
important role for an independent central bank to prevent and respond to crises. He was widely
regarded as an excellent teacher, who left a significant impact on his students. One such student
was HC 'Nugget' Coombs, the Reserve Bank's first Governor. Coombs described Shann as 'supremely
capable of communicating the excitement of intellectual exploration ... and establishing the sense of
[2]
social responsibility, which should guide those who work in academic fields'.
Taking inspiration from Shann, tonight I will talk to you about the role the Reserve Bank has played
in responding to the current crisis. I will describe what the Reserve Bank has done over the past year
to support the economy through the COVID pandemic. I will talk about why we have taken these
actions and some of the thinking behind the policy decisions. Then I will look at the outcomes of
these policy actions to date. Finally, I will highlight some of the issues the Bank will be thinking
about in the period ahead.
Policy actions during COVID
The Reserve Bank of Australia (RBA) has taken a number of complementary policy actions to support
the Australian economy since the onset of COVID. The RBA has lowered its policy interest rate to
near zero, set a target for the 3-year government bond yield, enhanced its forward guidance,
commenced a program of purchasing government bonds and provided long-term low-cost funding to
the banking system. I will explain each of these actions in more detail shortly.
The overall aim of all these monetary policy actions has been to support economic activity in
Australia through a number of channels. The policy actions have underpinned record low funding
costs across the financial system and for governments. Lower borrowing costs free up cash flow for
both households and businesses, some of which is spent. The lower interest rates and the funding
for the banking system support the flow of credit to households and businesses. Lower interest rates
also support asset prices, which boost balance sheets, and thereby consumption and investment.
Finally, a lower structure of interest rates leads to a lower value of the Australian dollar than would
otherwise be the case. The end result is a stronger Australian economy.
The policy response has evolved over the pandemic period as information about the extent of the
pandemic and its economic impact has unfolded. The initial policy decisions were taken in March
2020, including at an unscheduled policy meeting on 18 March. Further measures were announced in
[3]
September and November 2020 and in February 2021.
In mid March 2020, as the impact of the virus and the health policy actions on the Australian
economy became evident, the Reserve Bank Board put in place a comprehensive package at an
unscheduled meeting to support jobs, incomes and businesses, so that when the health crisis
receded, the country was well placed to recover strongly. The package comprised:
a reduction in the cash rate target (the policy interest rate) to 25 basis points, having
already reduced the cash rate to 50 basis points at the earlier March Board meeting
forward guidance that the Board will not increase the cash rate target until progress is
being made towards full employment and it is confident that inflation will be sustainably
within the 2-3 per cent target band
reducing the interest rate paid on Exchange Settlement (ES) balances (the balances the
banking system holds with the RBA) to 10 basis points
the introduction of a target on the 3-year Australian Government bond yield of around
25 basis points
the purchase of bonds to address the dysfunction in the Australian government bond
market
a Term Funding Facility (TFF) for the banking system under which funds equivalent to
3 per cent of lending could be borrowed from the RBA for 3 years at 25 basis points
(against eligible collateral) up until end September 2020. The TFF provided additional
incentives to support lending to businesses, particularly small and medium-sized
businesses
the continued use of the RBA's open market operations to make sure that the financial
system had a high level of liquidity. The RBA had already been expanding its liquidity
provision prior to the mid-March Board meeting to address the growing dislocation in
financial markets.
In September 2020, as the end-September deadline for the drawdown of funding under the TFF
approached, the Board decided to expand the TFF to provide additional low-cost funding equivalent
to 2 per cent of lending in the banking system. It also decided to extend the drawdown period for
this, as well as the additional funding linked to business lending, to June 2021.
In October, the Board changed its forward guidance to focus on actual outcomes for inflation, rather
than expected outcomes in guiding its future policy decisions.
At the November 2020 Board meeting, the Board decided on a further package of measures to
support the economy:
a reduction in the cash rate target, the 3-year yield target and the interest rate on new
drawings under the TFF to 10 basis points, from the previous rate of 25 basis points
a reduction in the interest rate on ES balances from 10 basis points to zero
the introduction of a program of government bond purchases, focusing on the 5 to
10 year segment of the yield curve. The RBA would buy $100 billion of government bonds
over the following six months in the secondary market, purchasing bonds issued by the
Australian Government (AGS) as well as by the Australian states and territories (semis).
The Board took this decision given the assessment that Australia was facing a prolonged period of
high unemployment and inflation was unlikely to return sustainably to the target range of
2-3 per cent for at least 3 years.
In February 2021, to provide further support to the Australian economy as it recovered, the Board
announced that it would purchase an additional $100 billion of government bonds, after the first
program was completed. Those purchases are underway now.
The policy actions taken to deliver low funding costs have had a number of complementary
elements, and have been mutually reinforcing in underpinning low interest rates across the economy.
Next, I will explain each of these actions in detail.
Policy rate reduction
The first policy action I will talk about is the reduction in the cash rate target. This has been the
primary lever of monetary policy for more than 3 decades now. The effect of this reduction in the
cash rate on financial markets and the economy have been similar to the experience over those
3 decades.
The reduction in the cash rate provides stimulus to the economy through a number of channels.
When the cash rate is lowered it reduces funding costs for the banking system which in turn flows
through to lower borrowing rates for households and businesses. These lower borrowing rates
stimulate borrowing and economic activity. The lower cash rate also boosts the cash flow of existing
borrowers. It supports asset prices, including housing prices, which boosts household wealth and
hence spending. In addition, it puts downward pressure on the Australian dollar which is stimulatory
for the economy.
The Board has reduced the cash rate target to what it assesses to be the effective lower bound of
10 basis points. The Board has stated that it does not see negative rates as being appropriate in
Australia in the current circumstances. I see there are at least two reasons for this. First, there is
uncertainty about the efficacy of negative interest rates, including because of the negative effect on
[4]
savers. Second, and at least as important, there were other actions that the Bank could take to
provide monetary stimulus, which we have taken.
In this episode, there has been an additional aspect of the cash rate reduction that is important to
highlight. At the same time as the cash rate target was reduced in March and November 2020, the
remuneration rate on ES balances was also reduced (Graph 1). The remuneration rate on ES
balances is the interest rate the RBA pays on deposits that banks hold with the RBA (I will refer to it
as the ES rate in the remainder of this speech). When the cash rate target is reduced, the ES rate is
also reduced.
Graph 1
Cash Market Rates
% %
Cash rate ES rate
Cash rate target*
0.75 0.75
0.50 0.50
0.25 0.25
0.00 0.00
M J S D M J
2020 2021
*
Assumes unchanged future policy settings
Source: RBA
Normally, this is not that important to anyone outside of those who manage the banking system's
accounts at the RBA. But this time around, the ES rate has much more significance.
In the past, the cash rate target set by the Board was the primary anchor for money market rates
and hence the whole structure of interest rates in the Australian financial system. The actual cash
rate, that is, the overnight interest rate at which banks borrow and lend their balances at the RBA,
was almost always equal to the cash rate target. The RBA conducted its daily market operations to
keep the size of ES balances small, with minimal 'excess liquidity' in the market, so that demand and
supply pressures in the market invariably ensured the cash rate traded at the cash rate target each
[5]
day.
Because of the policy actions I will talk about shortly, particularly the bond purchases and the TFF,
ES balances are now very large, around $200 billion. Put simply, the banking system has a very large
[6]
amount of deposits at the RBA. There is now a large amount of liquidity in the system. Some
banks still need to borrow overnight in the market to ensure their balance with the RBA remains
positive, but these amounts are very small. And there are a lot of banks with large ES balances who
are willing to lend to them. Given this balance of demand and supply, the actual cash rate is trading
just above the ES rate of zero, which is what the banks receive if they don't lend their excess
balances. In technical terms, given the large amount of liquidity in the system as a result of the
RBA's policy actions the RBA is now effectively operating a floor system, rather than the corridor
system that had been the case for the past few decades.
The actual cash rate has declined to around 3 basis points and has been around that level since
November, when the ES rate was reduced to zero. There is a small spread above the floor of the
corridor reflecting a small credit premium and transaction costs.
The actual cash rate is still the anchor of the structure of interest rates in the Australian financial
system. But it is the ES rate, rather than the cash rate target that is now the primary determinant of
the cash rate. The Board had fully expected this outcome of the actual cash rate declining below the
cash rate target, given the large increase in liquidity in the system.
ES balances are going to remain at a high level for quite a number of years, until the funds provided
to the banking system under the TFF are repaid, and until the government bonds the RBA has
bought mature. While ES balances are at a high level, the ES balance rate is going to continue to be
the main anchor of the cash rate.
The reduction in the cash rate target, the remuneration on ES balances and the actual cash rate has
seen all short-term interest rates in the Australian financial system decline to historically low levels,
including the important interest rate benchmark the Bank Bill Swap Rate (BBSW) (Graph 2). As the
graph shows, the BBSW rate has fallen even further because of the availability of low-cost funding to
the banking system. The lower BBSW rate translates directly to lower borrowing costs for the interest
rates that reference it, particularly business borrowing rates.
Money Market Rates
% %
3-month BBSW
0.75 0.75
0.50 0.50
0.25 0.25
Cash rate
Expected cash rate
0.00 0.00
M J S D M J S D
2020 2021
Sources: Bloomberg; RBA
In turn, these short-term interest rates, along with the low-cost funding available through the TFF,
have reduced the funding costs to the banking system and thereby resulted in large declines in
household and business borrowing rates (Graph 3).
Variable Lending Rates*
% %
8 8
Housing
6 6
4 4
% %
8 8
6 6
Business
4 4
2 2
2009 2013 2017 2021
*
Major banks; data from the EFS collection from July 2019
Sources: APRA; major banks' websites; RBA; Securitisation System
Forward guidance
The RBA's policy announcements have enhanced forward guidance about the Board's expectations
for the future path of monetary policy. The forward guidance takes the form of describing the
economic conditions the Board would be looking to see before it would consider raising the cash
rate. That is, the guidance is based on the state of the economy (in technical terms, the guidance is
state-based).
The Board's guidance has evolved over the past year to emphasise outcomes rather than forecasts.
That is, the Board has stated that it will not increase the cash rate until actual inflation, not forecast
inflation, is sustainably within the target range. In addition, it has stated this will require a lower rate
of unemployment and a return to a tight labour market.
That sort of guidance is meaningful for financial market participants and for economists. But many
people are interested about the Bank's views about how long it will be before the economy will reach
these conditions. They want to know how long it will be before interest rates start to rise. Hence, the
Bank has provided a possible timeframe alongside its description of the state of the economy
required before considering a rise in the cash rate.
At the May Board meeting earlier this week, the Board reiterated that in its central scenario, these
conditions are unlikely to be met until 2024 at the earliest. This complements the 3-year government
bond yield target and has helped underpin the low level of interest rates across the economy. But I
would highlight that it is the state of the economy that is the key determinant of policy settings, not
the calendar.
Bond purchases
Turning to government bond purchases, they have been comprised of three elements (Graph 4):
purchases to maintain the 3-year yield target
since November 2020, the bond purchase program
purchases to address market dysfunction.
Graph 4
RBA Bond Purchases
Face value; cumulative from 20 March 2020
$b $b
150 150
100 100
Total
50 50
AGS
Semis
0 0
M A M J J A S O N D J F M A M
2020 2021
Source: RBA
I will explain each of these in more detail.
Three-year yield target
From March 2020, the RBA commenced purchasing government bonds focussed on the 3 year point
of the yield curve. This is because in Australia, most borrowing is at variable rates that key off the
front part of the yield curve. This is in contrast to other markets such as the US where longer-term
yields are more important benchmarks for borrowing rates.
The 3-year yield target has helped anchor the Australian yield curve and has had significant traction
in lowering borrowing rates for households and businesses, together with the other policy measures
adopted. It has also helped reinforce the RBA's forward guidance regarding the cash rate.
It is appropriate to characterise the policy as a yield target not yield curve control. The RBA is
targeting one particular yield on the curve, not trying to control the curve as a whole. I will come
back to this when talking about the bond purchase program.
To maintain this target, the RBA has conducted auctions to buy the 3-year target bond when the
yield has moved above the target in a material and sustained way. Such purchases have been
necessary on relatively few occasions. Much of the time, the market has had sufficient confidence in
the sustainability of the target that the yield has been anchored close to the target, which was
25 basis points from March to November 2020, and then 10 basis points (Graph 5).
Graph 5
Three-year Australian Government Bond Yield*
% %
0.75 0.75
Target introduced
0.50 0.50
Target lowered
0.25 0.25
0.00 0.00
N D J F M A M J J A S O N D J F M A M
2019 2020 2021
*
Three-year yield target bond is the April 2023 Treasury bond until
20 October 2020, and the April 2024 Treasury bond thereafter
Sources: RBA; Yieldbroker
Initially the target was for the April 2023 bond maturity. Subsequently the target was changed to the
[7]
April 2024 maturity when it became the closest bond maturity to the 3-year horizon. In March
2021, the Board agreed that it would not consider removing the yield target completely or changing
the target yield of 10 basis points when reviewing the yield target bond later in the year. If the Board
were to maintain the April 2024 bond as the target bond, rather than move to the next bond
maturity that becomes closest to the 3-year horizon, the maturity of the target would gradually
decline until the bond finally matured in April 2024. The Board will consider whether to extend the
target to the next maturity at the July meeting.
In the past couple of months, while the 3-year government bond rate has remained very close to the
[8]
Board's target, the 3-year swap rate has risen relative to the 3-year government bond rate. The
swap rate often trades above the government bond rate because it involves more credit risk. But the
spread between the two has widened by around 20 basis points in recent months. In part this
reflects the market's expectations about the future direction of monetary policy. The market is
assigning some probability to the scenario that the cash rate could be higher in 2024 than the
[9]
Board's current forward guidance. This expectation is being reflected in the swap rate, but not in
the April 2024 bond rate, because the Bank is ensuring the bond rate remains at the target.
This move upward in the swap rate will put some upward pressure on longer-term household and
business borrowing rates. But the effect is unlikely to be that large. Overall funding costs for banks
remain at historic lows. Moreover, the 3-year yield target is still playing a significant role in anchoring
that part of the curve. If the yield target wasn't there, the government bond curve and swap rates
would be higher still.
Bond purchase program
In November 2020, the Board announced a quantity-based bond purchase program that is
complementary to the 3-year yield target. The Board decided to implement this policy for a number
of reasons. Longer-term Australian Government bond yields were higher than those in other
advanced countries. This provided evidence that the size of other central banks' bond purchase
programs was affecting longer-term Australian bond yields beyond the anchoring effect of the Bank's
3-year yield target. This in turn was contributing to a higher exchange rate, which was restraining
the recovery in the Australian economy.
The bond purchase program announced in November 2020 was for the purchase of $100 billion in
bonds of maturities of around 5 to 10 years over the following 6 months. It includes bonds of both
the Australian and state and territory governments, with $80 billion allocated to the Australian
Government and $20 billion to the state and territory governments. In February 2021 the Board
announced an additional $100 billion with the same composition and rate of purchase of $5 billion
[10]
per week. The bonds are purchased in the secondary market through transparent auctions.
The Board opted not to extend the yield target to a longer horizon for a number of reasons. First, the
yield target reinforces the Board's forward guidance on the cash rate. Three years is a reasonable
horizon over which the Board has some confidence about the economic outlook. Beyond that
horizon, the economic outlook is considerably less certain and with it, confidence about the settings
of monetary policy. Second, further out along the yield curve, other factors also start to have a
greater influence on yields, particularly global developments.
The RBA does not, and will not, directly finance governments. While the bond purchases are
lowering the cost of finance for governments - as is the case for all borrowers - the Bank is not
providing direct finance. There remains a strong separation between monetary and fiscal policy.
How do bond purchases work?
Bond purchases returned to the central bank toolkit in a number of advanced countries in the
aftermath of the global financial crisis. You might recall that economics textbooks used to talk about
monetary policy in terms of buying and selling government bonds to control the money supply. But
since the late 1980s, short-term policy interest rates rather than bond purchases to affect the money
supply have generally been the primary tool of monetary policy. When interest rates fell to their
lower bound after the GFC in some economies, including the US and Europe, central banks in a
number of economies again turned to bond purchases, often known as quantitative easing (QE), to
provide additional stimulus. (Japan had been in such a position a decade earlier).
How do bond purchases work to provide stimulus?
When the central bank buys a bond, it is putting downward pressure on government bond yields.
You can think of the central bank being an additional buyer of government bonds in the market.
More demand for government bonds increases the price of bonds and lowers bond yields. In turn the
lower bond yields flow through to lower borrowing rates for households and businesses (Figure 1).
From there the transmission is similar to that of a cash rate reduction that I talked about earlier.
Figure 1 : Stylised transmission mechanism
When the RBA buys a bond, it credits the account of the bank that it buys the bond from. The RBA's
balance sheet gets bigger: on the asset side there is the government bond, on the liability side there
is the deposit of the bank, in the form of a higher exchange settlement balance. The money supply
has increased, though in electronic form rather than physically.
When the bond matures, the government repays the RBA, just as it does any other bondholder. The
RBA's balance sheet shrinks: its bond-holdings decline and this is matched by a decline in exchange
[11]
settlement balances.
The banks are generally intermediaries in this transaction. The bonds that the banks sell to the RBA
in turn have probably been bought from an investor in government bonds such as a super fund. That
investor now has more money in their bank account, which does not pay them much of a return.
This incentivises these investors to switch into other assets to earn a higher rate of return. This
increases the price of other assets, such as equity prices and lowers interest rates on other fixed
income assets. The bond investor might be a foreign investor. They may choose to invest the money
[12]
in assets in other countries which would lead to a lower exchange rate.
So bond purchases work through a number of channels to put downward pressure on interest rates
for the government, households and businesses, as well as downward pressure on the exchange
rate.
There is also another important channel by which bond purchases operate. This is often referred to
as the signalling effect. As I said earlier, bond purchase programs have been introduced by central
banks when policy interest rates have been reduced to around their lower limit. The bond purchases
reinforce the view that the central bank will be keeping the policy rate low for a long period of time
(the bond purchases reinforce the forward guidance).
The presumption is that the central bank will stop its bond purchases before it begins to raise its
policy rate. That does not mean that the day the bond purchases stop is the day that the policy rate
increases. There may well be quite a period of time between those two actions. Rather, it is a
statement about the sequencing of policy actions.
Since the financial crisis, there has been a program of research into the effects of bond purchases or
QE. Recently, I was involved as an external adviser in a review by the Bank of England of its QE
[13]
Program. That review summarised the state of the research into the effects of quantitative
easing.
The review highlighted that much of the research has focussed on the impact of QE on financial
conditions, particularly bond yields and interest rates. It noted that there is much less research of the
impact of QE on output and inflation.
How should we think about the size of the bond purchase program? How stimulatory is it?
The general assessment of the research literature is that it is the stock of central bank bond
purchases that matters rather than the flow. That is, it is the total size of the purchases that affects
bond yields and financial conditions including the exchange rate, rather than how many bonds the
central bank is buying each week. Clearly the two are closely related. But one important implication
of this is that the stimulus remains in place even when the bond purchase program finishes. The
[14]
stimulus only begins to unwind as the bonds that the central bank has bought mature.
The RBA's estimate of the impact of the $100 billion bond purchase program that was announced in
November was that it would reduce the 10-year bond yield by around 30 basis points. The lower
yields would in turn put some downward pressure on the exchange rate. This estimate of the impact
of bond purchases on yields was based on a review of the experience in other economies, including
the literature referred to in the Bank of England report.
Our assessment is that this estimate has turned out to be close to the mark. We have reached this
[15]
assessment in a number of different ways, but all arrive at a similar conclusion. Bond yields
started to decline ahead of the actual announcement of the bond purchase program at the
November RBA Board meeting as the market formed the expectation that such a program was
increasingly likely. So the estimate of the impact has to take this into account. Graph 6 shows the
decline in the spread between Australian and US 10-year bond yields between September and
November last year as market expectations of a bond purchase program increased and were then
realised with the announcement at the November Board meeting. The US yield provides a reference
point for global developments affecting bond yields. Again this decline in the spread amounts to
around 30 basis points.
Graph 6
Government Bond Yields
10-year
% %
1.5 1.5
Australia
1.0 1.0
United States
ppt ppt
0.0 0.0
Differential
-0.5 -0.5
-1.0 -1.0
D M J S D M J
To repeat, our assessment is that the bond purchase program announced in November reduced
longer-term government bond yields by around 30 basis points. In turn, this led to a lower exchange
rate and easier financial conditions than otherwise would have been the case. The impact of these
easier financial conditions on output and inflation is harder to calibrate. We do not have any direct
Australian experience to draw on, although we are accumulating relevant experience now. Again, we
can draw on the experience in other economies, while noting that the outcomes in those other cases
are significantly influenced by their particular circumstances and the different structures of financial
systems across economies. For example, longer-term government bond yields have a much more
direct relationship with mortgage rates in the United States than they do in Australia.
An important thought to bear in mind at this point is that when a central bank announces a bond
purchase program, the market will form some expectation of the total size of the program. For
example, when the RBA announced its $100 billion purchase program in November that would run
for 6 months, it is highly likely that the market assumed that there would be further bond purchases
beyond that. That is, it was unlikely that there was only going to be one program. And that has
turned out to be the case here in Australia, with the Board announcing a further $100 billion of
purchases at its February meeting.
Hence the announcement effect of the program on bond yields and the exchange rate will include
some impact from the market's assessment of the whole size of the bond purchase program, not just
the size of the first one that is announced.
Moreover, as the economy evolves over the life of the bond program, the market will adjust its
assessment of the total expected size of the program, which will in turn affect bond yields and
broader financial conditions. (This is similar to the way that the market adjusts its expectations for
the future path of cash rate as the state of the economy changes).
This makes estimating the impact of bond purchase programs quite challenging. It is one explanation
why empirical work tends to find that subsequent QE programs have a smaller impact than the first
program. It is hard to separate out what the market had already been anticipating in terms of future
bond purchases.
We don't have good measures of the expectations of market participants about the size of the whole
program of bond purchases, particularly at the time of initial announcement. There is no obvious
bond market equivalent to the OIS curve, which provides a read on the market's expectations about
the future path of the policy rate. There are surveys of market economists' expectations of future
bond purchases by the RBA, but they are not necessarily the same as the expectations of
participants in the financial markets who actually determine bond yields and the exchange rate.
As I mentioned, the aim of the bond purchase program is to put downward pressure on bond yields
and the exchange rate to provide stimulus to the Australian economy. The RBA is not targeting any
particular level of bond yields, other than the 3-year target, nor the exchange rate. Nor is it targeting
any particular spread between Australian Government bond yields and US Government bond yields.
Our assessment is that the bond purchase program has continued to keep longer-term yields in
Australia about 30 basis points lower than they otherwise would have been, and the exchange rate
lower than otherwise. But I recognise that does depend on your assessment of the counterfactual:
that is, where would yields (and the exchange rate) have been if the bond purchases hadn't
occurred.
Yields will move as the Australian and global economies evolve. Earlier this year, there was a rise in
bond yields both globally and in Australia. This rise in yields reflected the better outcomes in the
Australian and global economies. The rise also reflected a rise in the market's expectations for future
[16]
inflation.
Yields rising because economic conditions are improving is a desirable outcome. It is not one that the
RBA and other central banks would seek to resist. The bond purchases are still working to ensure
that yields were lower than they otherwise would be, and continue to provide stimulus to the
economy. But the bond purchases are not intended to hold the whole structure of yields down at any
particular level.
Inflation expectations reflected in bond yields have risen to a point that is at best barely reaching
central banks' inflation targets, certainly not anything more than that. Bond markets have moved
from expecting a reasonable chance of deflation to expecting low inflation. And that outcome is only
achieved with the large stimulus in place currently.
In Australia, estimates of inflation in the bond market have inflation just reaching 2 per cent in a few
years' time. That is only just reaching the bottom of the RBA's inflation target range. The bond
market is not pricing any material risk of an inflation breakout.
I mentioned that the general consensus is that it is the size of the bond purchase program that is
relevant for assessing the degree of stimulus. Graph 7 shows the size of the bond purchase program
in Australia relative to those in other countries. I have shown the size along two dimensions. The
first is the size of the program relative to GDP. The second is the size relative to bonds on issue.
Both metrics are relevant in assessing the degree of stimulus.
Graph 7
Central Bank Government Bond Holdings*
% %
Per cent of GD