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RBA Glossary definition for basis point

basis point – A basis point is 1/100th of 1 per cent or 0.01 per cent, so 100 basis points (bps) is equal to 1 percentage point. The term is used in money and securities markets to define differences in interest or yield. If an interest rate were to increase from 2 per cent to 3 per cent, it is said to have risen by 100 basis points (bps) or one percentage point.

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The Yield and Market Function Effects of the Reserve Bank of Australia's Bond Purchases

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
In sum, the yield on the 10-year AGS declined by around 30 basis points. ... AGS yields declined across the curve in response to the identified events, with the cumulative change largest at the 10-year point at around 30 basis points (Figure 5).
https://www.rba.gov.au/publications/rdp/2022/2022-02/full.html

Implementation Effects

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
Yields and rates in basis points. Sources: Australian Office of Financial Management; Authors' calculations; Fenics; RBA; Yieldbroker. ... Yields and spreads in basis points. The sample is purchase days from 5 November 2020 to 10 February 2022.
https://www.rba.gov.au/publications/rdp/2022/2022-02/implementation-effects.html

Event Study of Announcement Effects

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
AGS yields declined across the curve in response to the identified events, with the cumulative change largest at the 10-year point at around 30 basis points (Figure 5). ... of between –7 and 25 basis points, suggesting that our event study result is
https://www.rba.gov.au/publications/rdp/2022/2022-02/event-study-of-announcement-effects.html

The Yield and Market Function Effects of the Reserve Bank of Australia's Bond Purchases

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
For the bond purchase program, we find an announcement effect of around 30 basis points for longer-term AGS yields, while any implementation effects were small and temporary.
https://www.rba.gov.au/publications/rdp/2022/2022-02.html

Conclusion

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
The actual purchases had an additional yield effect, with each percentage point of the free float of AGS purchased estimated to have reduced yields by up to around 1 basis points, ... Occasional bond purchases were required to reinforce the target.
https://www.rba.gov.au/publications/rdp/2022/2022-02/conclusion.html

Introduction

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
In sum, the yield on the 10-year AGS declined by around 30 basis points. ... 2020, and around 10 basis points from 4 November 2020 until 2 November 2021.
https://www.rba.gov.au/publications/rdp/2022/2022-02/introduction.html

Effects on Market Functioning

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
Spreads in basis points, purchases/holdings are shares in tens of percentage points. ... percentage points of bond purchases is associated with a 0.4 basis point increase in bond-futures mispricing, while an elevated stock lending fee is associated with
https://www.rba.gov.au/publications/rdp/2022/2022-02/effects-on-market-functioning.html

Additional Analysis of Yield Effects

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
further 1 basis point lower the next day, and continue to fall over the course of the week (Figure 13). ... and inflation deteriorated rapidly, the spread remained stable at around 25 to 30 basis points through to mid-2020 (Figure 14).
https://www.rba.gov.au/publications/rdp/2022/2022-02/additional-analysis-of-yield-effects.html

Non-technical summary for ‘The Yield and Market Function Effects of the Reserve Bank of Australia's Bond Purchases’

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
for purchases to support the three-year yield target:. the announcement lowered the targeted yield by around 20 basis points. ... for the bond purchase program:. the announcement lowered longer-term yields by around 30 basis points.
https://www.rba.gov.au/publications/rdp/2022/2022-02/non-technical-summary.html

How Bond Purchases Work, and the International Experience

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
yields decline by around 5–7 basis points on average, although the range of estimates is wide. ... Australia, and so applying the international experience to Australia would suggest a reduction in longer-term yields of around 25–35 basis points.
https://www.rba.gov.au/publications/rdp/2022/2022-02/how-bond-purchases-work-and-the-international-experience.html