At its meeting today, the Board of the Reserve Bank of Australia have decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent. It also decided to cease further purchases under the bond purchase program, much like other central banks overseas, with the final purchases to take place on 10 February.

• The Omicron outbreak has affected, but not derailed, the economy. The RBA’s forecast is for GDP growth of around 4¼ per cent over 2022 and 2 per cent over 2023.
• This outlook is supported by household and business balance sheets that are in generally good shape, an upswing in business investment, a large pipeline of construction work and supportive macroeconomic policy settings, but with further pandemic-related uncertainty.
• The unemployment rate declined to 4.2 per cent in December, and high numbers of job vacancies suggest further gains in employment over the months ahead.
• The Board is committed to maintaining highly supportive monetary conditions to achieve its objectives of a return to full employment in Australia and inflation consistent with the target.

To view the full statement of Philip Lowe, Governor of the Reserve Bank, please click here.

Published : 01 Feb 2022