October 5, 2021

No Surprise From RBA, Interest Rate Remains At 0.10%

 Australian Central Bank (RBA) policymakers decided to remain with interest rates and bond yield targets unchanged at 0.10% at the October edition policy meeting.

The central bank also agreed to continue buying government bonds at a rate of $ 4 billion per week until at least mid-February 2022.

Even so, no significant reaction was exhibited by the Aussie dollar following the decision as it had indeed been expected early on.

On the other hand, the depreciation of the Aussie dollar in today’s Asian session was impacted by the rise of the greenback dollar and the Evergrande issue which caused sentiment to continue to be risky.

According to a statement issued by the central bank, Governor Philip Lowe went on to reiterate that he does not see the conditions to drive interest rate hikes will be met before 2024.

As previously reported, Lowe also expects the economy to recover in the December quarter, as increases in vaccinations and more easing of restrictions are implemented.

Even so, price and wage pressures remain a risk for Australia. Therefore, an accommodative monetary policy will continue to be implemented to achieve the central bank's targets.