Interest Rate in Australia
Australia - Interest Rate
RBA keeps rates at all-time low in July; maintains target for government bond yields
At its monetary policy meeting on 7 July, the Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at an all-time low of 0.25%. Moreover, it reaffirmed it will keep the target for three-year government bond yields at 0.25%—set at an extraordinary policy meeting held on 19 March—to help support the smooth functioning of financial markets.
The economy is going through a significant downturn, with job losses topping 800,000 since March, although recent indicators show some signs of improvement as supportive fiscal and monetary measures have helped cushioned the economic blow from the pandemic. Meanwhile, the functioning of government bond markets has stabilized following the Bank’s interventions between March and May, in which it bought around AUD 50 billion of government bonds in secondary markets. The Bank also reiterated it stands ready to resume purchases if needed.
Looking forward, the Bank announced it will maintain the rate at its current all-time lows until the labor market returns towards full employment and inflation rises sustainably within the 2.0%–3.0% target range. The outlook is uncertain, as much will depend upon the effectiveness of containment measures both domestically and globally, which will in turn weigh on consumers’ and investors’ spending decisions. That said, the RBA also reiterated that the downturn has been less severe than expected, thanks to a faster-than-expected easing of restrictions on economic activity and the joint policy efforts of the government and the RBA.
The next monetary policy meeting is scheduled for 4 August.
FocusEconomics panelists see the cash rate ending 2020 at 0.25% and 2021 at 0.30%.
Australia - Interest Rate Data
|Policy Interest Rate (%)||2.00||1.50||1.50||1.50||0.75|
5 years of economic forecasts for more than 30 economic indicators.
Australia Interest Rate Chart
Source: Reserve Bank of Australia.
|Bond Yield||1.37||1.47 %||Dec 31|
|Exchange Rate||0.70||0.05 %||Dec 31|
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July 7, 2020
At its monetary policy meeting on 7 July, the Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at an all-time low of 0.25%.
June 19, 2020
Preliminary data shows nominal retail sales in May skyrocketed at the fastest pace on record amid easing coronavirus lockdowns.
June 18, 2020
Seasonally-adjusted employment nosedived by 227,700 in May, following a revised record-high 607,400 job lost in April (previously reported: -594,300).
June 11, 2020
The Westpac-Melbourne Institute consumer sentiment index jumped to 93.7 in June from 88.1 in May, consequently recovering further ground from the index’s worst reading since February 1991 recorded last April.
June 9, 2020
The business confidence index produced by National Australia Bank (NAB) rose to minus 20.0 points in May, from minus 45.5 points in April.