Reserve Bank of Australia сuts key rate to a record low

RTTNews reports that as the economic recovery is expected to be bumpy, Australia's central bank unveiled a package of measures to support job creation and underpin growth.

Reserve Bank of Australia decided to lower its key cash rate by 15 basis points to a record low of 0.10 percent.

The bank also decided to cut the target for the yield on the 3-year Australian Government bond to around 0.1 percent and to purchase A$100 billion government bonds of maturities of around 5 to 10 years over the next six months.

Further, the bank will reduce the interest rate on new drawings under the Term Funding Facility to 0.1 percent and cut the interest rate on Exchange Settlement balances to zero.

The bank said today's decision will assist the recovery by lowering financing costs for borrowers; contributing to a lower exchange rate than otherwise; and supporting asset prices and balance sheets.

Policymakers observed that addressing the high rate of unemployment as an important national priority.

According to RBA, economic growth is expected to be around 6 percent over the year to June 2021 and 4 percent in 2022.