Reserve Bank of Australia: interest rates to remain low until 2024

RTTNews reports that Australia's central bank raised the size of its asset purchase programme and signaled that it won't hike interest rates until 2024.

The policy board of the Reserve Bank of Australia decided to leave its cash rate unchanged at a record low of 0.10 percent.

The central bank retained the target yield on the 3-year Australian Government bond at around 0.1 percent and also the parameters of the Term Funding Facility.

But the board decided to buy an additional A$100 billion of bonds issued by the Australian Government and states and territories when the program is completed in mid-April. These additional purchases will be at the current rate of A$5 billion a week.

"The board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 percent target range. For this to occur, wages growth will have to be materially higher than it is currently," the bank said.

Both inflation and wages growth are forecast to pick up, but to do so only gradually, with both remaining below 2 percent over the next couple of years, the board said. In underlying terms, inflation is expected to be 1.25 percent over 2021 and 1.5 percent over 2022.

Policymakers expect the economic recovery to continue, with the central scenario being for GDP to grow by 3.5 percent over both 2021 and 2022. GDP is expected to return to its end-2019 level by the middle of this year.