RBA kept monetary policy unchanged as widely expected. The cash rate is held at 0.25% and target of 3-year AGS yield at 0.25% too. The central bank also pledged to maintain the accommodative approach for “as long as it is required”. Also, “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.”
RBA also said the employment conditions have “stabilised” recently and the economic downturn has been “less severe than earlier expected”. However, the “nature and speed” of economic recovery remains “highly uncertain”. Uncertainty is also ‘affecting consumption and investment plans”. The pandemic is prompting many firms to “reconsider their business models”.