By world standards, Australia’s debt is low and the country’s AAA credit rating boosted the interest of overseas investors since the global financial crunch, said Guy Debelle, a central bank assistant governor.
“The stock of debt on issue remains considerably less as a share of GDP than nearly all other jurisdictions," Debelle said in a capital markets summit in Sydney on Monday.
"The vast majority of the post-crisis CGS issuance has been purchased by non-residents attracted to the Australian government's AAA credit rating and favourable level of yields relative to other highly-rated sovereign issuers."
In February, the RBA announced the surprise rate cut to 2.25% and there are still expectations of additional rate cuts this year. The move is believed to have kept bond yields low.
“The February reduction in the cash rate target and associated repricing of market expectations for future monetary policy have contributed to a decline in yields,” he said.
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