Australia: RBA remains on hold in April
At its monetary policy meeting on 6 April, the Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at the all-time low of 0.10%. It also left the target for three-year government bond yields at around 0.10%, and reaffirmed the size and extension of its bond-buying plans.
Available figures reveal that the recovery is well underway and is stronger than previously expected, also propelled by sizable fiscal and monetary stimulus. Meanwhile, the global recovery is being supported by the rollout of vaccines, although it remains uneven and the outlook is surrounded by notable uncertainty due to possible further outbreaks of the virus. All told, the Bank expects the economy to record above-trend growth in both 2021 and 2022. That being said, the economy and the labor market will be operating with substantial spare capacity, which led the RBA to keep its loose monetary policy stance unchanged.
The Bank kept its dovish tone in its communiqué, stating that it expects to maintain the cash rate at its current all-time low until the labor market returns to full employment, wage growth accelerates substantially and actual inflation is within its 2.0–3.0% target range, which it does not see until 2024.
The next monetary policy meeting is scheduled for 4 May.