Alex Druce and Steven Deare
(Australian Associated Press)
The Reserve Bank has left the cash rate at 0.25 per cent and reaffirmed a 25 basis-point yield target on three-year Australian government bonds.
Most analysts expected the rate to remain unchanged after the bank lowered it to a record level at its March 18 emergency meeting.
The bank’s first out-of-cycle meeting since 1997 also used quantitative easing measures in a bid to cushion the economic pain brought by the COVID-19 pandemic.
Governor Philip Lowe said the bank had bought about $36 billion of government bonds in secondary markets, including bonds issued by the states and territories.
The bank also made its first drawings under the term funding facility on Monday, he said.
This will lower funding costs for banks and help lenders provide credit to struggling businesses.
However, Mr Lowe said he expected a very large economic contraction to be recorded in the June quarter.
He expected unemployment to increase to its highest level for many years.
The Australian dollar rose by 0.0034 US cents to buy 61.21 US cents at 1436 AEST, shortly after the decision.