A negative interest rate in Australia is “extraordinarily unlikely”, the Governor of the Reserve Bank of Australia (RBA) said on Tuesday, Phillip Lowe, at the press conference after the monetary policy meeting.
Lowe, however, added that the RBA “is not out of firepower” after the latest easing policy.
Featured statements:
If we need to do more about the bond purchase, we can and we will.
Other tools include increased provision of liquidity, asset purchases and transactions in the foreign exchange market.
There is little to be gained from lowering the monetary policy rate to negative territory.
Higher Australian bond yields have put some upward pressure on the Australian dollar.
The Buying bonds should reduce borrowing costs and the AUD, raising asset prices.
The board considered aiming for a longer performance, say five years, but decided against it.
The RBA does not finance public spending; the debt must be repaid by the government.
The pandemic will have lasting economic effects; an abrupt recovery in jobs is unlikely.
The Board considers addressing the high unemployment rate to be a national priority.
The responsibility for job creation rests primarily on the shoulders of business and government.
A slow job creation, an unemployment rate of around 6% at the end of 2022.
We expect an annual salary growth of less than 2% in each of the next two years.
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Credits: Forex Street
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