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6/1/2021, 6:32 AM (Source: TeleTrader)
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RBA maintains current monetary policy

The Reserve Bank of Australia (RBA) Governor Philip Lowe said on Tuesday the bank decided to maintain its current policy settings, including a 10-point target for the cash rate and the yield on the 3-year Australian Government bond, a 0% rate on Exchange Settlement balances, and an unchanged bond purchase program. In July, the Board will consider whether to retain the April 2024 bond as the target bond for the 3-year yield target or to shift to the next maturity, the November 2024 bond.

The RBA predicts a 4.75% increase in GDP this year and 3.5% in 2022, as supported by fiscal measures and very accommodative financial conditions. It stated unemployment has fallen faster than expected and stood at 5.5% in April, projected to fall to 5% by the end of the year. However, it added inflation and wage pressures are still subdued, with inflation seen at 1.5% this year and 2% in mid-2023. In the short term, CPI inflation is expected to rise temporarily to be above 3% in the June quarter because of the reversal of some COVID-19-related price reductions, the bank predicted.

Baha Breaking the News (BBN) / DJ