Minutes of June 2 RBA board meeting noted that while Australian economy was experiencing the “biggest economic contraction since the 1930s”, the downturn would be “shallower than earlier expected”. Though, outlook remained “highly uncertain” and the pandemic was “likely to have long-lasting effects” on the economy.
The policy package was “working broadly as expected”. The “substantial, coordinated and unprecedented easing of fiscal and monetary policy” was also helping the economy through this difficult period. Both fiscal and monetary support “would be required for some time”. This accommodative approach would be “maintained as long as required”.
The policy package included keeping cash rate at 0.25%, 3 year AGB yield target at 0.25%, Term Funding Facility to support credits and 10bps interest rate on Exchange Settlement balances.
