The Reserve Bank might have to increase its $100 billion quantitative easing program, especially to state governments, after the NSW budget revealed a bigger debt burden than expected and borrowing costs for governments have drifted up again.
The RBA has committed to buying about $20 billion of state government bonds, known as semis, as part of the new formal $100 billion bond-buying program. It had been buying semis before the latest QE announcement.
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Matthew Cranston is the United States correspondent, based in Washington. He was previously the Economics correspondent and Property editor. Connect with Matthew on Twitter. Email Matthew at mcranston@afr.com
