RBA leaves monetary policy settings unchanged, as expected
|At its December monetary policy meeting this Tuesday, the Reserve Bank of Australia (RBA) board members decided to maintain the official cash rate (OCR) at a record low of 0.10%, as widely expected.
The RBA left its three-year bond yield target unchanged at 0.10%.
The board decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on 3-year Australian government bonds, as well as the parameters of the term funding facility and the government bond purchase program,” the statement read.
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.
FX implications
The RBA’s status-quo decision was on the expected line and therefore, failed to move the Australian dollar, with the AUD/USD pair holding the higher ground around 0.7360 on the announcement.
All eyes now remain on Fed Chair Powell’s testimony and the US economic data for fresh impetus.
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