The first meeting of policy makers for this year in the Reserve Bank of Australia (RBA) policy meeting ended with the central bank maintaining interest rates and the 3-year government bond yield target at 0.10%.
However, contrary to market expectations, the central bank decided to further expand its $ 100 billion bond purchase program from mid-April to help support employment and increase inflation.
The central bank's statement to buy more bonds has pushed its 10-year bond yield to 1.115%, after jumping to a 10-month high of 1.19% at the start of the session.
This result also led to the decline in Aussie dollar trading after rising at the beginning of the Asian session.
Meanwhile, in Governor Philip Lowe's speech following today's RBA decision, he said the economic recovery was ongoing and stronger than previously expected.
However, he stressed that his party would not increase interest rates until the employment target and inflation of 2-3% could be achieved.
In addition, Governor Lowe said current monetary policy settings continued to help the economy by lowering financing costs for borrowers, contributing to lower exchange rates and supporting credit offerings.
Meanwhile, the RBA can see the scenario that Australia's Gross Domestic Product (GDP) is projected to increase by 3.5% in 2021 and 2022 and growth is expected to return to the end of 2019 by the middle of this year.
