moussahawa
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- Sep 12, 2007
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dude, when the RBA buys back second hand CGS, when you buy something, you are giving the other party (banks) money, therefore increase liquidity, and because der is an increase in liquidity, the cash rate has to decrease, therefore indirectly interest rates decrease@who said:dude , for q2. if the RBA purchases govnt securities then they decrease thier liquidity not increase it.