RBA left monetary policy unchanged as widely expected. Cash rate target and 3-year AGS yield target are kept at 0.10%. The parameters and term funding facility and government bond purchases were maintained too. It continued to expect no increase in cash rate for “at least 3 years”. Bond purchase size will continue to be under review. The Board is “prepared to do more if necessary”.
Regarding the economy, RBA said “recent data have generally been better than expected… but the recovery is still expected to be uneven and drawn out and it remains dependent on significant policy support”. GDP would not reach pre-pandemic level until the end of 2021. While employment growth was strong in October, further rise in unemployment is still expected. Inflation is expected to remain subdued till 2022.
