At its meeting today, the Board of the Reserve Bank of Australia have decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on 3-year Australian Government bonds, as well as the parameters of the Term Funding Facility and the government bond purchase program.
- Globally, the news has been mixed recently. On the one hand, infection rates have risen sharply in Europe and the United States and the recoveries in these economies have lost momentum.
- On the other hand, there has been positive news on the vaccine front, which should support the recovery of the global economy.
- The Bank’s policy response has lowered interest rates across the yield curve, which will assist the recovery by: lowering financing costs for borrowers; contributing to a lower exchange rate than otherwise; and supporting asset prices and balance sheets.
The Board will keep the size of the bond purchase program under review, particularly in light of the evolving outlook for jobs and inflation. The Board is prepared to do more if necessary.
To view the full statement of Philip Lowe, Governor of the Reserve Bank, please click here.
Published : 30 Nov 2020