Reserve Bank of Australia monetary policy decisions.

  • cash rate at 0.1%
  • 3-year bond yield target at 0.1%
  • to expand government bond buying programme by A$100 bln
  • to buy government bonds of 5 to 10 years maturity
  • will buy bonds issued by the Australian government and by the states and territories, with an expected 80/20 split
  • reduces the interest rate on new drawings under the term funding facility to 0.1 per cent
  • the purchase of $100 bln of 5-10 yr govt bonds will be over the next six months
  • ESA cut to zero
  • RBA says do not expect to raise the cash rate for at least three years
  • says decided on a package of further measures to support job creation and the recovery of the Australian economy from the pandemic
  • is prepared to do more if necessary.
  • says package includes the purchase of $100 billion of government bonds of maturities of around 5 to 10 years over the next six months
  • says under the program to purchase longer-dated bonds, the bank will buy bonds issued by the Australian government and by the states and territories
  • says monetary and fiscal support will be required for some time
  • says bonds will be bought in the secondary market through regular auctions, with the first auction to be held this Thursday
  • the bank remains prepared to purchase bonds in whatever quantity is required to achieve the 3-year yield target
  • wages growth will have to be materially higher than it is currently to reach inflation target
  • says any bonds purchased to support 3-yr target would be in addition to the $100 billion bond purchase program
  • to keep the size of the bond purchase program under review
  • positive GDP growth is now expected in the September quarter, despite the restrictions in Victoria
  • says in the central scenario, GDP growth is expected to be around 6 per cent over the year to June 2021 and 4 per cent in 2022
  • it will take some time to reach the pre-pandemic level of output
  • unemployment rate is expected to remain high, but to peak at a little below 8%
  • lower interest rates across the yield curve will contribute to a lower exchange rate than otherwise
  • at the end of 2022, the unemployment rate is forecast to be around 6%
  • this extended period of high unemployment and excess capacity is expected to result in subdued increases in wages and prices over coming years
  • in underlying terms, inflation is forecast to be 1 per cent in 2021 and 1½ per cent in 2022

I bolded a few of those main points (via Reuters) above

On the Australian dollar the RBA says the policy actions today will contribute to a lower exchange rate

Full text of Lowe's statement:

If you are after background on this, earlier posts:

Reserve Bank of Australia monetary policy decisions.