The Reserve Bank says there is scope to cut interest rates further as new figures showed the decline in jobs is not just confined to Victoria.
Australia’s official cash rate remains at 0.25 per cent after the Reserve Bank board decided to maintain current settings amid the coronavirus recession.
Reserve Bank officials have kept the official cash rate at the record low of 0.25 per cent as the economy remains flattened by the coronavirus recession.
The board at its regular meeting opted to maintain the cash rate target and the yield on three year government bonds of 25 basis points, as economists expected.
The board has decided to boost the bank’s term funding facility, which will allow banks and other institutions more funding.
They will be able to draw an equivalent of two per cent of their outstanding credit, at a fixed rate of 25 basis points for three years, until the end of June.
RBA Governor Philip Lowe said the term funding decision would help keep interest rates low for borrowers and help financial institutions provide credit.
He said financial institutions had drawn $52 billion from the term funding facility. The board decision will increase the total amount available to about $200 billion.
Mr Lowe said economic recovery was underway in Australia although the path was likely to be bumpy.
“Indeed, fiscal and monetary support will be required for some time given the outlook for the economy and the prospect of high unemployment,” he said.
The RBA has not changed the cash rate since March, when it announced quantitative easing measures as the pandemic took hold in Australia.