Money in Australia
Australia - Money
RBA holds its ground in June
At its monetary policy meeting on 1 June, 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 reiterated it will consider whether to retain the current yield target and/or to undertake further bond purchases at its July meeting.
The decision was motivated by data showing that although the recovery in both GDP and the labor market is well underway and stronger than previously expected, price pressures remain moderate. Meanwhile, the global recovery is progressing amid the rollout of vaccines, and although pandemic-related uncertainty persists, it should wane as vaccination campaigns continue to gain speed. All told, the Bank expects the economy to expand 4.8% and 3.5% in 2021 and 2022, respectively. On the price front, the RBA projects a temporary spike in prices in the second quarter due to a low base effect.
The Bank kept its dovish tone in its communiqué, reiterating 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 comfortably within its 2.0–3.0% target range, which it does not see until 2024. Additionally, it added that it will monitor the evolution of housing prices—currently on the rise—and borrowing costs in order to maintain favorable lending conditions.
The next monetary policy meeting is scheduled for 6 July.
Commenting on the possible outcome of the Bank’s next meeting, Robert Carnell, head of research for the Asia-Pacific region at ING, stated:
“If the RBA does decide to continue to run its asset purchase scheme beyond September at its July meeting, then there are few constraints to them doing so. […] Typically, central banks pursuing these sorts of policies prefer not to hold more than 30% of the outstanding stock of government debt, though there are examples where the ownership goes much higher than this.”
FocusEconomics panelists forecast the cash rate to end 2021 at 0.10% and 2022 at 0.12%.
Australia - Money Data
|Money (annual variation in %)||13.7||8.2||8.9||2.3||22.1|
5 years of economic forecasts for more than 30 economic indicators.
Australia Money Chart
Source: Reserve Bank of Australia and FocusEconomics calculations.
|Bond Yield||1.37||1.47 %||Dec 31|
|Exchange Rate||0.70||0.05 %||Dec 31|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
June 9, 2021
GDP rose 1.8% in seasonally-adjusted quarter-on-quarter terms in Q1, benefiting from strong fiscal and monetary stimulus.
June 6, 2021
At its monetary policy meeting on 1 June, the Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at the all-time low of 0.10%.
June 3, 2021
Nominal retail sales grew 1.1% month-on-month in seasonally-adjusted terms in April (March: +1.3% s.a.
May 20, 2021
On 11 May, the government unveiled its 2021–2022 budget, amid an ongoing and stronger-than-expected economic recovery from the downturn caused by the pandemic.
May 20, 2021
Seasonally-adjusted employment decreased by 30,600 in April, following 77,000 jobs gain in March and surprising markets on the downside.