Reserve Bank of Australia
June 2, 2020
As was expected, Australia’s central bank board left its official cash rate unchanged at 0.25% and reiterated that “it is likely this monetary support will be required for some time.” In assessing the future, Governor Lowe opined, ” the outlook, including the nature and speed of the expected recovery, remains highly uncertain and the pandemic is likely to have long-lasting effects on the economy. In the period immediately ahead, much will depend on the confidence that people and businesses have about the health situation and their own finances.” The OCR had been cut twice in March by 25 basis points each time to its current level. On a brighter note, the statement revealed a lessening recent need for quantitative stimulus: the Bank has purchased government bonds on only one occasion since the previous Board meeting, with total purchases to date of around $50 billion. The Bank is prepared to scale-up its bond purchases again and will do whatever is necessary to ensure bond markets remain functional and to achieve the yield target for 3-year AGS. The target will remain in place until progress is being made towards the goals for full employment and inflation.”
Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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