After last month’s highly anticipated rate cut, the Reserve Bank has held the cash rate at 0.10% in December, as was expected.
Today’s board meeting saw the cash rate remain unchanged, which was pretty much the universally expected outcome after the Reserve Bank said last month it would be leaving the cash rate unchanged for several years.
“With the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero, interest rates have been lowered as far as it makes sense to do so in the current environment,” it said.
“The Board considers that there is little to be gained from short-term interest rates moving into negative territory and continues to view a negative policy rate as extraordinarily unlikely.”
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Last month was quite different however, as Governor Philip Lowe said a rate cut then made sense as the economy began to reopen post-pandemic restrictions.