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Statement by Philip Lowe, Governor: Monetary Policy Decision
At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points. The global economy is experiencing a severe downturn as countries seek to contain the coronavirus. Many people have lost their jobs and a sharp rise in unemployment is occurring. At the same time, the containment measures have reduced infection rates in a number of countries. If this continues, a recovery in the global economy will start later this year, supported by both the large fiscal packages and the significant easing in ... (full story)
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RBA: The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.$AUD
— Cable FX Macro (@cablefxmacro) May 5, 2020
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RBA: The functioning of the government bond markets has improved and the yield on 3-year (AGS) is at the target of around 25 basis points. Given these developments, the Bank has scaled back the size and frequency of bond purchases, which to date have totalled around $50 billion.
— Cable FX Macro (@cablefxmacro) May 5, 2020
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RBA: In the baseline scenario, output falls by around 10 per cent over the first half of 2020 and by around 6 per cent over the year as a whole. This is followed by a bounce-back of 6 per cent next year. $AUD
— Cable FX Macro (@cablefxmacro) May 5, 2020
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RBA holds rates even as economic hit from virus widens
The Reserve Bank has held official interest rates at 0.25 per cent even as signs grow the economic hit from the coronavirus pandemic is widening. Following the bank's regular monthly meeting, governor Philip Lowe confirmed the RBA was sticking with the record-low cash rate it set at the start of the pandemic. While Dr Lowe has signalled on several occasions 0.25 per cent is as low as the bank is prepared to take official rates, financial markets had put the chance of a cut on Tuesday at 60 per cent. The same markets believe the RBA's cash rate will still be at 0.25 per cent by October next year. The RBA will on ... (full story)
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