SYDNEY, Dec 1 (Reuters) - Australia's central bank held
rates at near-zero in a widely expected move on Tuesday as easy
monetary and fiscal policies propped up the coronavirus-hit
economy, fueling demand for homes and boosting construction
At its last policy meeting of the year, the Reserve Bank of
Australia (RBA) left its cash rate and the three-year government
bond yield target at 0.1% while maintaining its A$100
billion quantitiative easing programme.
In a short post-meeting statement, Governor Philip Lowe
sounded optimistic about a recovery as the country has
confidently reopened with almost zero new coronavirus cases.
"The economic recovery is under way and recent data have
generally been better than expected," Lowe said.
"This is good news, but the recovery is still expected to be
uneven and drawn out and it remains dependent on significant
Lowe reiterated the board was unlikely to raise the cash
rate for at least three years and was prepared to do more if
The decision to stand pat comes as data indicates
Australia's A$2 trillion economy likely rebounded sharply last
quarter from its first recession in three decades.
Australia's worst downturn since the Great Depression,
rising unemployment and feeble inflation prompted the RBA to
slash the cash rate three times this year while the federal
government unleashed a A$300 billion fiscal spending plan.
The stimulus has ignited fire in the property market where
home prices jumped 0.8% in November while approvals for new
homes have surged to 20-year highs.
Lowe said the fiscal and monetary support will be required
for some time, given both employment and inflation are expected
to stay subdued.
He did not mention the housing market in his statement
though he might be grilled on the topic by a parliamentary
economics committee where Lowe will make an appearance on
(Reporting by Swati Pandey; Editing by Sam Holmes)