At its meeting today, the Board of the Reserve Bank of Australia have decided on a package of further measures to support job creation and the recovery of the Australian economy from the pandemic.
The elements of today’s package are as follows:
- a reduction in the cash rate target to 0.1 per cent
- a reduction in the target for the yield on the 3-year Australian Government bond to around 0.1 per cent
- the purchase of $100 billion of government bonds of maturities of around 5 to 10 years over the next six months.
With Australia facing a period of high unemployment, the Reserve Bank is committed to doing what it can to support the creation of jobs.
This extended period of high unemployment and excess capacity is expected to result in subdued increases in wages and prices over coming years.
Given the outlook for both employment and inflation, monetary and fiscal support will be required for some time. For its part, the Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.
To view the full statement of Philip Lowe, Governor of the Reserve Bank, please click here.
Published : 01 Nov 2020