the past couple of months, while the 3 - year government bond rate has remained very close to the board's target, the 3 - year swap rate has risen relative to the 3 - year government bond rate. [ 8 ] 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 board's current forward guidance. [ 9 ] 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 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

of global economic integration as i just noted, the economic integration of widely separated regions is hardly a new phenomenon. two thousand years ago, the romans unified their far - flung empire through an extensive transportation network and a common language, legal system, and currency. one historian recently observed that " a citizen of the empire traveling from britain to the euphrates in the mid - second century ce would have found in virtually every town along the journey foods, goods, landscapes, buildings, institutions, laws, entertainment, and sacred elements not dissimilar to those in his own community. " ( hitchner, 2003, p. 398 ). this unification promoted trade and economic development. a millennium and a half later, at the end of the fifteenth century, the voyages of columbus, vasco da gama, and other explorers initiated a period of trade over even vaster distances. these voyages of discovery were made possible by advances in european ship technology and navigation, including improvements in the compass, in the rudder, and in sail design. the sea lanes opened by these voyages facilitated a thriving intercontinental trade - although the high costs of and the risks associated with long voyages tended to limit trade to a relatively small set of commodities of high value relative to their weight and bulk, such as sugar, tobacco, spices, tea, silk, and precious metals. much of this trade ultimately came under the control of the trading companies created by the english and the dutch. these state - sanctioned monopolies enjoyed - and aggressively protected - high markups and profits. influenced by the prevailing mercantilist view of trade as a zero - sum game, european nation - states competed to dominate lucrative markets, a competition that sometimes spilled over into military conflict. the expansion of international trade in the sixteenth century faced some domestic opposition. for example, in an interesting combination of mercantilist thought and social commentary, the reformer martin luther wrote in 1524 : " but foreign trade, which brings from calcutta and india and such places wares like costly silks, articles of gold, and spices - which minister only to ostentation but serve no useful purpose, and which drain away the money of the land and people would not be permitted if we had proper government and princes... god has cast us germans off to such an extent that we have to fling our gold and silver into foreign lands and make the whole world rich, while we ourselves remain beggars. " ( james, 2001, p. 8