RBA kept cash rate target and 3-year AGB target unchanged at 0.10%. It announced to buy an additional AUD 100B of government bonds, including states and territories, after the current program completes in mid-April. The additional purchases will be held at current rate of AUD 5B per week. On forward guidance, RBA maintained the pledge that it ” will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range”. It doesn’t expect the conditions to be met “until 2024 at earliest”.
In the central scenario of economic outlook, RBA expects GDP to grow 3.5% in both 2021 and 2022. GDP will reach end-2019 level by the middle of this year. Unemployment rate will be around 6% by the end of 2021, and 5.5% by the end of 2022. CPI is projected to be at 1.25% over 2021 and 1.50% over 2022.
