RBA’s Lowe: Will maintain current setting of interest rates until a strong recovery is in place

Speaking at the post-monetary policy meeting press conference on Thursday, the Reserve Bank of Australia (RBA) Governor Lowe said that they are doing all that we can to lower funding costs in Australia and support the supply of credit to business, adding that they will maintain the current setting of interest rates until a strong recovery is in place.

Additional quotes

Living in extraordinary times.

Term funding scheme and three-year yield target are both significant policy developments that would not have been under consideration in normal times.

Both carry financial and other risks for the reserve bank.

Both represent significant interventions by the bank in Australia’s financial markets.

Doing all that we can to lower funding costs in Australia and support the supply of credit to business.

Board expects the cash rate will remain at its current level for some years, but not forever.

Bond purchases will be in the secondary market and we will not be purchasing bonds directly from the government.

Our intention is to purchase bonds of different maturities.

Prepared to buy semi-government securities to achieve the target.

Not seeking to have the three-year yield identically at 25 basis points each and every day.

Emphasis is not on bond quantities, we are not setting objectives for the quantity and timing of bonds that we will buy.

Not able to provide updated set of economic forecasts, the situation is just too fluid.

Expect a major hit to economic activity and incomes in Australia that will last for a number of months.

We are also expecting significant job losses.

We are expecting a recovery once the virus is contained.

Every extra dollar lent to large business, lenders will have access to an additional dollar of funding from the reserve bank.

For every extra dollar of loans to small and medium-sized businesses they will have access to an additional five dollars.

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