RBA again keeps rates and policy on hold
The Reserve Bank has left monetary policy unchanged after its monthly board meeting.
In a statement, RBA Governor Philip Lowe said the board decided to maintain the current monetary policy settings, including targets of 10 basis points for the cash rate and the yield on the three-year Australian Government bond, as well as the parameters of the term funding facility and the government bond purchase program.
Australian economic data have mostly been stronger than expected in the past month.
Quarterly economic growth rose by 3.1 per cent, exceeding expectations of a 2.5 per cent rise, while business confidence hit a decade high in March, and consumer confidence remained upbeat.
The economy added over 89,000 jobs in February, almost three times the consensus estimate, and CoreLogic's March house price index surged by 2.8 per cent month-on-month.
While the RBA has warned that it's important that lending standards remain sound in an environment of rising housing prices and low interest rates, it has warned of "uncertainty" about the effect that the end of the JobKeeper wages subsidy last month will have on jobs. Still, the minutes of the RBA's March board meeting said that the end of JobKeeper was "unlikely to result in a sustained increase in the unemployment rate".
Repeating the guidance it gave last month, Dr Lowe said: "The board remains committed to maintaining highly supportive monetary conditions until its goals are achieved."
"The board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range," he added.
"For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The board does not expect these conditions to be met until 2024 at the earliest."
Originally published as RBA again keeps rates, policy on hold