The Reserve Bank of Australia (RBA) maintained interest rates at its last policy meeting for 2020, saying it would remain unchanged for at least three more years.
The central bank had previously lowered interest rates and government bond yield targets to a low of 0.10% and maintained its quantitative easing program of A $ 100 billion in November.
RBA Governor Philip Lowe in a recent statement said banks were doing their best to recover the Australian economy from the recession caused by the Covid-19 pandemic crisis.
According to Lowe, economic recovery is underway and recent data is generally better than expected. However, recovery is still seen as uneven and it still depends on significant policy support.
In the central bank scenario, the economy is expected to grow around 5% next year and 4% by 2022. While inflation is expected to be unable to meet the central bank's target for a 2 to 3% increase over three years or more.
Governor Lowe, reiterating his earlier statement that the RBA is unlikely to raise interest rates for at least another three years and is ready to do more if necessary. The central bank is also said to continue to evaluate the size of the government bond purchase program.
The Aussie dollar continued to rise following Governor Lowe's more optimistic statement, as well as being supported by positive current sentiment following confidence in the Covid-19 vaccine.
