Second, the TLTROs are expected to increase excess liquidity, which reduces interest rates in the short-term money market. Remember that banks take into account the risk-free yield curve when pricing their loans. This curve depends in turn on the expected evolution of the short-term, i.e. money market, interest rate curve.
Investment in Australia by Asian countries, whether measured in terms of the stock outstanding or the flow of new investment, remains small in comparison. Japan is by far the largest Asian investor in Australia, with a share of 5 per cent; other Asian countries’ investments in Australia are noticeably smaller.