RBA Holds Cash Rate at Record Low, But Moves to Taper Monetary Stimulus

RBA Governor Philip Lowe at the Standing Committee on Economics at Parliament House on February 05, 2021, in Canberra, Australia. Sam Mooy/Getty Images

The Reserve Bank of Australia (RBA) has decided to hold the cash rate at a record low of 0.1 percent, reiterating its expectation to keep it unchanged until 2024. However, the central bank will scale back its response to the stronger-than-expected economic recovery.

The change means the RBA  is tapering off its massive monetary stimulus from its weekly government bond purchase, which will drop from $5 billion (US$3.7 billion) to $4 billion (US$2.9 billion), in early September after the completion of the current 12-month long $200 billion  (US$159 billion) stimulus program.