RBA left cash rate unchanged at 0.25% as widely expected. It also reaffirmed the 0.25% target for 3-year government bond yield with asset purchases. The central bank also said that it “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.”
RBA also said noted there is “considerable uncertainty” about the near-term outlook of the economy. Much depends on the successful of coronavirus containment and the length of social distancing. Nevertheless, “a very large economic contraction” is expected in Q2 and unemployment is expected to rise to its “highest level for many years”.