The Reserve Bank of Australia (RBA) announced no change in monetary policy at its July session policy meeting, keeping interest rates at lows and a 3 -year bond yield target at 0.10%.
At the same time, policymakers also decided to continue buying government bonds after the completion of the current bond -buying program in early September.
These purchases will continue at a rate of $ 4 billion a week until at least mid-November and policymakers will conduct further reviews later that month.
Meanwhile, RBA Governor Philip Lowe said that Australia’s economic recovery was stronger than expected and he predicted it would continue to show growth.
However, despite the strong recovery in the job market, inflation and wage levels are still weak.
Lowe said that, keeping interest rates unchanged is one of the steps taken by the central bank to support the economy as it moves from a recovery to an expansionary phase.
Interest rates will not be raised until inflation and employment can reach central bank targets. Therefore, an increase in interest rates is unlikely to happen until at least 2024.
The increase in coronavirus cases in Australia is seen to play a key role in the latest RBA decision today, as the country struggled to curb the spread of an epidemic triggered by the spread of Delta variants.
The Aussie dollar was seen unimpressed by the RBA’s latest decision, although the currency initially recorded a depreciation. Entering the European session, the Aussie dollar traded higher at a one -week high against the weaker USD.
