Cash Rate Remains On Hold At 0.25%.
The RBA has decided to leave official interest rates on hold at 0.25% . Albeit the current economic downturns, infection rates are reduced and if this remains, the recovery in the economy will start later this year.
The RBA further stated that:
‘There has been a substantial, coordinated and unprecedented fiscal and monetary response in Australia to the coronavirus. Without this response, the outlook would have been even more challenging. These policies are supporting the economy right now and will help when the recovery comes. They are supporting people's incomes, maintaining the important connections between businesses and their employees, underpinning the supply of credit to businesses and households, and keeping borrowing costs low. The deferral of loan and other payments is helping people manage their cash flows. The Australian banking system, with its strong buffers of capital and liquidity, is also helping the economy traverse this difficult period.'
For now, it will be a watch and see as we monitor the unemployment rate. However low rates are here to stay with the RBA not anticipating to increase rates until full employment is reached.
05 May, 2020