Business

Aussie central bank keeps interest rate on hold at 0.1 percent

Feb 02, 2021

Sydney (Australia), February 2: The Reserve Bank of Australia (RBA) used its first meeting of the year to keep the official interest rate on hold at 0.1 percent on Tuesday.
The RBA also moved to continue a quantitative easing program with the purchase of an additional 100 billion Australian dollars (76.2 billion U.S. dollars) worth of state and federal government bonds, to be made at a rate of 5 billion Australian dollars (3.8 billion U.S. dollars) per week starting from mid-April.
RBA Governor Philip Lowe said in a statement that the outlook for the global economy had improved in recent months with the development of vaccines.
"While the path ahead is likely to remain bumpy and uneven, there are better prospects for a sustained recovery than there were a few months ago," Lowe said.
He added that the economic recovery in Australia was well under way and had so far been stronger than earlier expected.
"There has been strong growth in employment and a welcome decline in the unemployment rate to 6.6 percent," Lowe said.
"Retail spending has been strong and many of the households and businesses that had deferred loan repayments have now recommenced repayments."
Lowe said he expected Australia's GDP to return to pre-pandemic levels by mid-2021, however he said the board would not increase the interest rate until inflation reached a 2 to 3 percent target range which was not anticipated to occur until 2024 at the earliest.
Source: Xinhua