At its policy meeting, the RBA:
- maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent
- continue to purchase government securities at the rate of $4 billion a week until at least mid February 2022.
The board said it is committed to maintaining highly supportive monetary conditions to achieve its objectives of a return to full employment in Australia and inflation consistent with the target. While inflation has picked up, it remains low in underlying terms. It said inflation pressures are also less than they are in many other countries, not least because of the only modest wages growth in Australia. The board will not increase the cash rate until actual inflation is sustainably within the 2 per cent to 3 per cent target range. This will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently. The RBA said this is likely to take some time and the board is prepared to be patient.