RBA Minutes: Three-year yield target to be maintained until full employment, inflation goals reached


The Reserve Bank of Australia (RBA) is out with its June meeting’s minutes on Tuesday, citing that the board members recognized that the global economy was experiencing a severe downturn.

Additional points

Affirmed that the target for three-year yields would be maintained until progress is made towards the bank's goals of full employment and the inflation target.

Over the preceding month, infection rates had declined in many countries.

If this were to continue, a recovery in the global economy could be expected to continue.

Would not increase the cash rate until progress is made on employment, inflation targets.

Australian economy was experiencing the biggest economic contraction since the 1930s.

It was possible that the downturn would be shallower than earlier expected.

Likely that fiscal and monetary support would be required for some time.

The outlook remained highly uncertain and the pandemic was likely to have long-lasting effects on the economy.

Accommodative approach would be maintained as long as required.

Members agreed that the bank's policy package was working broadly as expected.

Prepared to scale up bond purchases again, if necessary.

The bank had purchased government bonds on only one occasion since the previous meeting.

Banks had indicated they planned to draw upon term funding facility in greater volumes over coming months to replace existing debt as it matures.

Housing loan payments, including payments into offset accounts, had increased sharply in April.

Information from contacts in the bank's business liaison program had reported that buyer interest in new dwellings had declined significantly over recent months.

Members noted these conditions had dampened the outlook for dwelling investment once the current pipeline of work had been completed.

Market reaction

AUD/USD kept its range around 0.6940 on the RBA minutes release, as it had little impact on the aussie dollar. 

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