The Reserve Bank of Australia has retained the official interest rate at current levels, flagging further assistance will be needed for the country’s economic recovery out of the coronavirus pandemic.
In its monthly monetary policy statement released on the first Tuesday of every month, the RBA said it would keep the cash rate at 0.1 per cent while global economic output is hindered by COVID-19.
It has also decided to purchase an additional $100bn worth of government bonds as the additional monetary support is set to expire in April.
“The outlook for the global economy has improved over recent months due to the development of vaccines,” RBA Governor Philip Lowe said.
“While the path ahead is likely to remain bumpy and uneven, there are better prospects for a sustained recovery than there were a few months ago.”
“That recovery, however, remains dependent on the health situation and on significant fiscal and monetary support. Inflation remains low and below central bank targets.”
The update is the first outlook statement by the central bank for 2021, with economists predicting current stimulus measures would remain at current settings.
More to come…