Reserve
Bank of Australia (RBA) kept interest levels unchanged at record low of 0.25%
and the bank's statement language was less pessimistic than before because of
the gradual opening of the economy.
In
the statement issued today, the bank indicated that it will maintain the cash
facility program as long as necessary.
RBA
Governor Philip Lowe said the bank was ready to increase government bond
purchases if necessary to ensure three-year yield stability around 25 basis
points.
Lowe
added that the Australian economy, which is valued at a $ 2 trillion, is
experiencing its biggest contraction since 1930 this quarter, but the bottom of
the curve is expected to be lower than previous expectations.
These
expectations are due to the noticeable decline in infection cases, the easing
of restrictions on closings and signs indicating the stable working hours in
May.
Lowe
noted that monetary and financial support may continue for some time.
"Market operations will continue to support the high levels of liquidity
in the Australian financial system," he said. "The outlook for
normalcy and the expected speed of recovery remains unclear."
He
also said that "the pandemic is likely to have a long-term impact on the
economy."
Economic
data
Official
data released earlier showed that Australia posted a record current account
surplus in the last quarter as strong export prices and lower imports boosted
growth in a timely manner.
Earlier
in the day, Australian data showed that the current account index recorded 8.4
billion, while expectations stabilized to record 6.3 billion compared to the
previous reading revised by 1.7 billion.
Tomorrow,
markets will closely watch GDP data for the first quarter of the year and some
expect growth not to shrink in this period as previously feared.
The
Bank expects GDP to shrink by 10% in the first half of the year.
In
a related context, a Reuters poll showed that there is a possibility of A $ 2
trillion shrinking by 0.3% in the three months ended March, the first quarterly
decline in 9 years. The survey also showed that annual growth is expected to
slow to 1.4% compared to 2.2% in 2019.
The
Australian government and reserve had pledged to spend a $ 250 billion to avoid
an economic recession that could result from an outbreak of the Coronavirus.
Many
of the monetary facilities are expected to end in September, but Morrison said
there is potential for further support.
As of 10:55 GMT, the
Aussie dollar extended its advance versus its U.S. counterpart at 0.6869, the
highest since January 13.
