The Reserve Bank of Australia (RBA) board of directors announced at the first meeting of this year that the official interest rate will remain at a record low of 0.1%, and also announced plans to increase the purchase of government bonds by an additional 100 billion Australian dollars. Governor Philip Lowe, the Governor of the Reserve Bank of Australia, will announce the Reserve Bank of Australia’s economic expectations on Wednesday, and recently confirmed that there will be no changes to the key policies of the Reserve Bank of Australia this month.
The Reserve Bank of Australia’s decision to maintain the current interest rate target is not surprising. The market predicts that interest rates will remain at current levels for up to three years. The substantial increase in housing prices and the improvement in the job market have triggered expectations from all walks of life that the Reserve Bank of Australia will change its quantitative easing plan. Dr. Lowe said that the economic recovery is progressing smoothly and is stronger than expected. I am very happy to see strong employment growth, with the unemployment rate dropping to 6.6%.
Dr. Lowe said that the situation facing the country has both risen and fallen. Bjorn Jarvis, head of labor statistics at ABS, said wage levels have risen in all states and territories. “The challenge with the new data is whether it can distinguish between economic changes and regular seasonal changes. Before we have enough data to make seasonal adjustments, annual comparisons are an effective way to illustrate seasonality.” Since mid-March, the accommodation industry (-14.7%), IT (-13.1%), and the education and training industry (-13.8%) paid jobs are still significantly reduced.
