RBA is expected to keep its accommodative policy for extended period of time

The Reserve Bank of Australia, as widely expected, left its ultra-low interest rates unchanged on today’s policy meeting and expressed its commitment to maintain accommodative policy until inflation rises and unemployment drops.

The central bank also said it will carefully monitor trends in housing borrowing, as property prices soared at the fastest pace in three decades in March, lifted by the prospect of years of record low interest rates and the RBA pointed to the importance of maintaining lending standards.

The RBA cut interest rates three times last year and launched a massive quantitative easing program in response to the crisis caused by coronavirus pandemic.

The central bank’s Governor Lowe said that the cash rate would remain at 0.1% until at least 2024, until the inflation rises sustainably within its 2-3% target range.

Australia managed to pull out of its first recession in three decades by its fiscal and monetary response to the crisis, with encouraging signals from data in recent months on retail sales, construction activity, consumer sentiment and business confidence that surpassed expectations.