RBA Says Depth of the Economic Downturn May Be Less Than Expected
By James Glynn
SYDNEY–The Reserve Bank of Australia left its policy settings unchanged at a board meeting Tuesday, signaling that while the outlook appears a little more encouraging, great uncertainty will hang over the economy for some time yet.
The RBA board chose to keep the official cash rate steady at 0.25%, and held its 3-year bond yield target at the same level.
“It is possible that the depth of the downturn will be less than earlier expected…there are signs that hours worked stabilized in early May, after the earlier very sharp decline,” RBA Governor Philip Lowe said in a statement.
Still, the outlook remains highly uncertain and the pandemic is likely to have “long-lasting effects on the economy,” he added.
“In the period immediately ahead, much will depend on the confidence that people and businesses have about the health situation and their own finances,” Mr. Lowe added.