At its meeting today, the Board of the Reserve Bank of Australia have decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances of zero per cent.

• The economic recovery in Australia has been stronger than was earlier expected. The recent outbreaks of the virus are, however, interrupting the recovery and GDP is expected to decline in the September quarter.
• The CPI inflation rate spiked to 3.8 per cent for the year to the June quarter, largely reflecting the unwinding of some earlier COVID-19-related price declines.
• Domestic financial conditions remain very accommodative, sovereign bond yields have declined and the exchange rate has depreciated to around its lowest level this year, despite elevated levels of commodity prices.

The Board remains committed to maintaining highly accommodative monetary conditions to support a return to full employment in Australia and inflation consistent with the target.

To view the full statement of Philip Lowe, Governor of the Reserve Bank, please click here.

Published : 03 Aug 2021