The Reserve Bank of Australia (RBA) kept its cash rate unchanged after holding its first meeting of 2020 on Tuesday. It also remained optimistic despite the ongoing plagues experienced locally and worldwide in bushfires and virus outbreak, seeing great possibilities of monetary easing.
The central bank of Australia was seen cutting its rate thrice in the previous year to 0.75% to sustain and achieve employment and inflation goals. It also kept its economic growth prediction for this year at 2.75% and 3% for the year 2021.
The optimistic outlook was attributed to the sustained low level of interest rates, tax refunds, and infrastructure spending according to RBA Governor Philip Lowe. He also said that the bank expects a recovery in residential construction in the latter part of the year.
Meanwhile, Australia’s travel bans in China is seen by the National Australia Bank analysts to cause 0.15 percentage points cut from the first-quarter gross domestic product (GDP) growth, aside from the bushfires toll.