RBA holds key rate at a record low of 0.10% in May, AUD/USD whipsaws
|The Reserve Bank of Australia (RBA) board members decided to leave the official cash rate (OCR) on hold at a record low of 0.10% after concluding their May monetary policy meeting,
The RBA maintained its target of 10 basis points for yield on a 3-year Australian government bond.
The central bank also maintained the parameters for the government bond purchase programme, adding that they do not expect these conditions to be met until 2024 at the earliest.
A Reuters poll showed last week, “all but one of 25 economists surveyed see no change to policy at the Reserve Bank of Australia's (RBA) May 4 board meeting. One economist predicted a 5-basis point cut to 0.05%.”
FX implications
The AUD/USD pair popped and dropped but remained within a familiar range around 0.7750 on the expected RBA decision.
The spot was last seen trading at 0.7742, where it was pe-RBA announcement, down 0.24% on the day.
About RBA rate decision
RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.
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