Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
The Reserve Bank of Australia says the economic outlook for the coming months is uncertain, but has kept its interest rate policies unchanged at its monthly board meeting.
That includes keeping the cash rate at a record low 0.10 per cent.
“The economic recovery in Australia has been stronger than was earlier expected,” Reserve Bank governor Phillip Lowe said in a statement on Tuesday.
“The recent outbreaks of the virus are, however, interrupting the recovery and GDP is expected to decline in the September quarter.”
However, Dr Lowe said the experience to date has been that once virus outbreaks are contained, the economy bounces back quickly.
The board has decided to stick to its plan to reduce its bond buying program to $4 billion a week from early September from $5 billion currently.
Economists speculated that the RBA would delay a reduction in the program, which aims to keep market interest rates and borrowing cost low, because of the expected deterioration in the economic outlook.