RBA: cash rate remains unchanged 6 months on from historic cut

Six months on from the historic emergency rate cut to 0.25% in March, the Reserve Bank of Australia (RBA) has elected to once again leave the cash rate unchanged.The decision was made at the RBA’s regular monetary policy meeting, which happens on the first Tuesday of every month. As it stands, members do not anticipate a cash rate change for at least three years, a point RBA Governor Philip Lowe affirmed while appearing before the House of Representatives Standing Committee on Economics in August.“The Board has clearly indicated that it will not increase the cash rate until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2-3 per cent target range,” Dr Lowe told the committee. “Given the outlook I discussed earlier, these conditions are not likely to be met for at least three years. So, it is highly likely that the cash rate will be at this level for some years and having a target for three-year yields of 25 basis points …

RBA maintains official cash rate at 0.25% as Australian economy hits a turning point

Date: 4 August 2020At its August board meeting, the Reserve Bank of Australia (RBA) elected to once again hold monetary policy, leaving the cash rate at 0.25%, where it has sat since March.The decision was largely expected, and the board has stated on numerous occasions it would not be increasing the cash rate until progress is made towards employment and inflation targets.It has, however, not completely ruled out making future changes to its monetary support package and is willing to do so if circumstances permit.As it stands, the current RBA support package is as follows:Cash rate reduced to 25 basis points.Bond buying program implemented with aim to achieve a 3-year yield target of 25 basis points.Term Funding Facility created to give authorised deposit taking institutions (ADIs) so banks and lenders equity as needed to support customers.Although satisfied with its current package, during its July meeting the board hypothesised alternative monetary policy changes that could have be…

RBA declares rate hold but urges banks to increase lending

Despite fears of future negative rates from the corporate community, the RBA has held firm, electing to hold the cash rate at 0.25%, where it has sat since its emergency rate cut in mid-March.
Today’s decision falls in line with the bank’s previous rhetoric. On multiple occasions Reserve Bank Governor, Philip Lowe has been quoted as saying that the cash rate is “extraordinarily unlikely” to drop into the negative, most recently affirming this stance during the recent FINSIA Forum on 21 May, a panel discussion between Australian financial regulators.
“I said previously that it was extraordinarily unlikely that we would have negative interest rates and there has been no change,” Dr Lowe said.
“The board is not contemplating negative interest rates in Australia. I think the costs of that exceed the benefits.”
However, in past weeks the corporate world has been quietly preparing in case of a rate drop.
John Elias, leader of national law firm Minter Ellison’s debt capital markets practice told