RBA keeps rate near zero as economy recovers rapidly

The Reserve Bank of Australia kept its rates near zero for a fifth straight meeting on Tuesday and vowed to keep policy super loose for a prolonged period despite the rapid pace of the country’s economic recovery from the coronavirus crisis.

Australia’s central bank reaffirmed its promise to keep the cash rate at the record low of 0.1% for as long as is needed to cushion unemployment and push inflation higher.

The central bank’s widely expected policy decision comes as it projects the A$2 trillion ($1.55 trillion) economy, and raised the growth prediction to 4.75% over 2021, from the 3.5% forecast in February.

Moreover, the country’s unemployment rate is seen plunging to be around 5% at the end of this year and 4.5% at Dec-2022. In February, the RBA’s forecast had unemployment at 5.5% by the end of 2022.

RBA, placing a high priority on a return to full employment, will release detailed economic forecasts on Friday.