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."
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.