Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
The Reserve Bank of Australia has left the cash rate at 0.1 per cent after its monthly board meeting, as widely anticipated by economists.
However, the central bank is no longer targeting the three-year bond yield, but will retain its bond buying regime at $4 billion a week until at least mid-February 2022.
Governor Philip Lowe reiterated the RBA will not increase the cash rate until actual inflation is sustainably within the two to three per cent inflation target.
However, there was a slight changing in the wording for the timing of such a move, having for many months not expected these conditions to evolve before 2024.
“This will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently,” Dr Lowe said in his post-meeting statement.
“This is likely to take some time. The board is prepared to be patient, with the central forecast being for underlying inflation to be no higher than 2.5 per cent at the end of 2023 and for only a gradual increase in wages growth.”
The governor will be holding a rare webinar for the media at 4pm AEDT.