The RBA uses Open Market Operations (OMOs) to support the cash interest rate at the target rate. It does predominantly using repurchase agreements (Repos) which means that in a known time period the transaction will have to be reversed. The increase in liquidity is designed to deal with a relatively short-term exigency. OMOs also have an additional purpose, to better align the yield curve. During the COVID-19 crisis, the RBA has needed to use OMOs for both purposes to carry out its mandated role of implementing monetary policy. It has been doing that successfully. It cannot bar the private sector from buying government securities when the Australian Office of Financial Management is standing in the market to sell them to ensure that the government's account at the RBA maintains a positive balance. This duck is not quacking or swimming like a duck that is intent on financing the government's deficit. To date, the government has been able to ensure that it has sufficient revenue from taxation payments and the sale of government securities to fund its expenditure without your 'duck'.
