The Australian government will lower the amount of bonds it will buy this financial year in response to a better than expected budget deficit fuelled by a strong economic recovery as outlined by Treasurer Frydenberg late last week in the government’s Mid-Year Economic and Fiscal Outlook (MYEFO).
The Australian Office of Financial Management (AOFM) advised that planned gross issuance of Treasury Bonds for 2021-22 will be around $105 billion (of which $44.3 billion has been completed). Planned gross issuance of Treasury Indexed Bonds will be $5‑5.5 billion (of which $4.1 billion has been completed).
The AOFM will now raise about $61 billion in bonds by the end of June, which is a cut by about one-third of their initial raise estimate.
Also read: 2022 Outlook: Australian Fixed Interest
Australia’s Reserve Bank has been buying an average of $3.5 billion of government bonds per week in the secondary markets to stimulate lending and investment.
The AOFM said a more detailed schedule, including new maturities, will be announced on the 7th of January.
The MYEFO shows the budget expects to receive an extra $106 billion in revenue over four years since the earlier May forecasts. This includes $95 billion in tax revenue.